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HALIFAX, Aug. 11, 2008 (Canada NewsWire via COMTEX News Network) -- /NOT FOR DISTRIBUTION ON U.S. WIRE SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES/
Holloway Lodging Real Estate Investment Trust (TSX: HLR.UN, HLR.DB and HLR.DB.A) ("Holloway" or the "REIT") today announced its unaudited financial results for the three and six months ended June 30, 2008. All amounts are in Canadian dollars unless otherwise indicated. This press release should be read in conjunction with the REIT's unaudited interim consolidated financial statements and management's discussion and analysis, copies of which are available on the REIT's website at www.hlreit.com and on the Sedar website at www.sedar.com.
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Highlights - Second Quarter
The following summarizes the key highlights that occurred during the three
months ended June 30, 2008:
- Distributable income increased over 104% - distributable income
increased by 104% to $3.2 million ($0.08 per unit) from $1.6 million
($0.08 per unit) for the three months ended June 30, 2008 and 2007,
respectively;
- Hotel revenues increased over 82% - hotel revenues increased to
$23.7 million from $13.0 million for the three months ended June 30,
2008 and 2007, respectively;
- Hotel EBITDA per available room increased 7.2% - hotel EBITDA per
available room increased to $36.61 from $34.16 per room for the three
months ended June 30, 2008 and 2007, respectively; and
- Hotel EBITDA margin increased by 4.5 percentage points - hotel EBITDA
margin increased to 34.1% from 29.6% for the three months ended
June 30, 2008 and 2007, respectively.
"Our strong increases in same store occupancy, rate, RevPAR and EBITDA
margin for the quarter on a year over year basis is very encouraging and
positions Holloway nicely for the remainder of 2008," said Glenn Squires,
Chief Executive Officer of Holloway Lodging REIT.
RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2008
and 2007
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The following table provides a summary of the operating results for the
three and six months ended June 30, 2008 and 2007.
(in 000's except Three months Three months Six months Six months
number of units ended ended ended ended
and per unit June 30, June 30, June 30, June 30,
results) 2008 2007 2008 2007
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Hotel revenues $ 23,669 $ 12,987 $ 46,377 $ 22,634
Hotel expenses 21,774 11,672 43,098 20,832
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Income from hotel
operations 1,895 1,315 3,279 1,802
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Net trust expenses 1,870 910 3,845 1,796
Future income tax
expense (recovery) 203 (382) 242 (382)
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Net income (loss)
for the period -
basic and diluted ($ 178) $ 787 ($ 808) $ 388
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Reconciliation to
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distributable income
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Add/(deduct):
Depreciation and
amortization $ 3,300 $ 1,290 $ 6,562 $ 2,250
Future income tax
expense (recovery) 203 (382) 242 (382)
Accretion on mortgages
and convertible
debentures 538 174 1,058 319
Unit-based
compensation 118 107 342 195
Unrealized foreign
exchange (gain) loss (31) - 128 -
FF&E reserve (710) (390) (1,391) (679)
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Distributable income -
basic and diluted $ 3,240 $ 1,586 $ 6,133 $ 2,091
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Weighted average
basic units
outstanding 39,108,768 19,342,346 39,130,759 18,012,963
Weighted average
diluted units
outstanding 39,108,768 19,494,780 39,130,759 18,168,228
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Basic income (loss)
per unit ($ 0.01) $ 0.04 ($ 0.02) $ 0.02
Diluted income (loss)
per unit ($ 0.01) $ 0.04 ($ 0.02) $ 0.02
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Basic distributable $ 0.08 $ 0.08 $ 0.16 $ 0.12
income per unit
Diluted distributable $ 0.08 $ 0.08 $ 0.16 $ 0.12
income per unit
Distributions
declared $ 0.135 $ 0.1125 $ 0.27 $ 0.225
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THREE MONTHS ENDED JUNE 30, 2008 AND 2007
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Results of Operations
The results of operations for the three months ended June 30, 2008 include the operation of twenty-two hotels for the full quarter. The dollar value of revenues and expenses has increased substantially when comparing the second quarter results for 2008 to the second quarter of 2007 as the REIT owned twenty hotels at the end of the second quarter of 2007, of which ten hotels were acquired on June 22, 2007.
Hotel Operations
The hotel properties generated revenue of approximately $23.7 million for the three months ended June 30, 2008 compared to $13.0 million for the three months ended June 30, 2007. Hotel EBITDA has increased to $8.1 million from $3.8 million, an increase of 110%. Depreciation and amortization has increased substantially due to the growth in the asset base.
Corporate Operations
Corporate net trust expenses were $1.9 million for the three months ended June 30, 2008 and $0.9 million for the three months ended June 30, 2007. Debenture interest expense and the non-cash accretion of the discount on the debentures has increased to $1.8 million from $0.7 million because the REIT has $72.1 million in debentures outstanding compared to $20.4 million outstanding for most of the second quarter of 2007. During the three months ended June 30, 2008, the REIT generated interest income of $0.7 million from loans receivable and the investment of cash balances, compared to $0.4 million in the second quarter of 2007.
General and administrative expenses were $0.6 million for the three months ended June 30, 2008 compared to $0.5 million for the three months ended June 30, 2007. These expenses include salaries and benefits of employees of the REIT, travel, fees related to legal, audit and annual filings, and other expenses.
Distributable Income
The REIT generated $3.2 million in distributable income ($0.08 basic and diluted per unit) for the three months ended June 30, 2008 compared to $1.6 million ($0.08 basic and diluted per unit) for the same period in 2007. Distributions of $0.045 per unit per month were declared and totalled $5.3 million for the three months ended June 30, 2008. Distributable income will fluctuate due to the seasonality in the hospitality industry and the timing of acquisitions.
The REIT's second quarter distributions exceeded the distributable income. Excess, un-deployed cash was used to fund the distribution shortfall. To help mitigate this shortfall, effective February 1, 2008, the management of 10 hotels purchased in June 2007 is now being performed by Pacrim Hospitality Services Inc. at a substantially reduced fee.
Holloway Lodging Real Estate Investment Trust
Holloway is a real estate investment trust listed on the Toronto Stock Exchange. Our goal is to be one of the top-performing lodging REITs and to grow our distributions to our unitholders. We will continuously seek to improve our operating results by focusing on dominating the market segments in which we operate and maximizing product quality through a prudent capital reinvestment program.
This press release contains forward-looking information within the meaning of applicable securities laws. Forward-looking information may relate to the REIT's future outlook and anticipated events or results and may include statements regarding the future financial position, property acquisition strategies and opportunities, business strategy, financial results and plans and objectives of the REIT. Particularly, statements regarding the REIT's future operating results, property acquisition strategies and opportunities and economic performance are forward-looking statements. In some cases, forward-looking information can be identified by terms such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or other similar expressions concerning matters that are not historical facts. Forward looking-information is subject to certain factors, including risks and uncertainties, that could cause actual results to differ materially from what the REIT currently expects and there can be no assurance that such statements will prove to be accurate. Some of these risks and uncertainties are described under "Risk Factors" in Holloway's Annual Information Form ("AIF"), dated March 28, 2008 which is available at www.sedar.com. The REIT does not intend to update or revise any such forward-looking information should its assumptions and estimates change.
SOURCE: HOLLOWAY LODGING REAL ESTATE INVESTMENT TRUST
Mr. Glenn Squires, Chief Executive Officer of the REIT; Mr. Michael Jackson,
President and Chief Operating Officer of the REIT; Ms. Tracy Sherren, Chief Financial
Officer of the REIT, (902) 404-3499
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