November 29, 2018 - 5:41 PM EST
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Lakeview Hotel Investment Corp Announces Third Quarter Results

Canada NewsWire

WINNIPEG, Nov. 29, 2018 /CNW/ - Lakeview Hotel Investment Corp ("LHIC") is pleased to report its financial results for the Quarter ended September 30, 2018.  The following comments in regard to the financial results should be read in conjunction with the September 30, 2018 financial statements and Management Discussion and Analysis which are available on the SEDAR website www.sedar.com.

The 3rd quarter of 2018 was a challenging one for Lakeview Hotel Investment Corp as Alberta struggled with a precipitous decline in oil prices.  The spread between West Texas Intermediate (WTI) and Western Canada Select (WCS) oil prices reached the largest levels in history, largely due to transportation constraints in getting Alberta oil to market. While WTI traded at well north of $60 per barrel, the price that oil producers in Alberta were selling oil for dropped under $20 per barrel.  There does not appear to be a near term solution to this problem.  The Alberta Government would like to see a sharp increase in rail capacity to provide some near term relief.  The Federal Government does not support this approach and would rather see a long term solution to the problem through an increase in pipeline capacity.  In the meantime oil prices languish in Alberta.   As a result of the extremely low price of WCS activity in the oil patch was unusually slow during what is typically a very robust period.  This directly impacted occupancy levels at many of the hotels in the Lakeview portfolio.

Major projects that have been announced unrelated to the delivery of oil should in the future significantly benefit many of Lakeview's hotels.  These projects include a $40 billion LNG Canada project in Kitimat, the $10.7 billion site C dam in Fort Saint John and the $3.5 billion Heartland Petrochemical Complex in Strathcona.   All are expected to contribute to improved operating results going forward.  The most immediate results are expected from the Heartland project which should be moving forward at full speed in 2019.  This should have a very positive impact on the property in Fort Saskatchewan.

Focused sales efforts that began at the Calgary property and have been extended to other hotels in the Lakeview Hotel Investment Corp portfolio are anticipated to positively impact results going forward.

Following is a comparison of the operating results for the three and nine months ended September 30, 2018 and the comparable period in 2017:


Three months ended

Nine months ended


September 30


September 30



2018

2017

2018

2017

Hospitality Revenue





Room

4,637,703

5,483,429

11,284,876

13,698,645

Food & Beverage

554,738

601,087

1,721,228

1,824,025

Other

303,797

316,192

758,187

838,389

Total Revenue

5,496,238

6,400,708

13,764,291

16,361,059

Expenses

6,328,625

6,478,009

18,229,490

18,971,796

(Loss) Gain on sale of income properties

-

(39,443)

6,728

(24,342)

Net income (loss)

(832,387)

(116,744)

(4,458,471)

(2,635,079)

Basic and diluted income (loss) before income tax per share

(0.043)

(0.006)

(0.228)

(0.135)

Reconciliation to funds from operations





Add (deduct)





Amortization of income properties

475,474

508,996

1,419,126

1,551,244

Amortization of franchise fees

375

374

1,123

1,122

Loss (Gain) on sale of income properties

-

39,443

(6,728)

24,342

Distributions from Lakeview Flag Management General Partnership

-

-

-

18,000

Income from Lakeview Flag Licensing General Partnership

(135,558)

(149,964)

(323,708)

(379,005)

Income from Lakeview Flag Management General Partnership

(63,371)

(73,136)

(158,076)

(186,596)

Unrealized loss (gain) on change in fair value of interest rate swap

(74,707)

(324,718)

(143,155)

(797,388)

Funds from operations

(630,174)

(115,749)

(3,669,889)

(2,403,360)

Basic and diluted funds from operations per share

(0.032)

(0.006)

(0.188)

(0.123)

Contributions to reserve account

(108,052)

(126,279)

(256,744)

(318,332)

Adjusted funds from operations

(738,226)

(242,028)

(3,926,633)

(2,721,692)

Basic and diluted adjusted funds from operations per share

(0.038)

(0.012)

(0.201)

(0.139)

Reconciliation to distributable income





Loss on derecognition of income properties

7,279

2,075

8,582

15,105

Loss on modification of financial liability

-

-

35,441

-

Accretion of debentures

141,593

43,274

488,568

128,217

Accretion of mortgage payable

1,145

1,122

3,381

3,438

Accretion of other long-term debt

101,147

84,524

297,556

254,730

Distributable income

(487,062)

(111,033)

(3,093,105)

(2,320,202)

Basic and diluted distributable income per share

(0.025)

(0.006)

(0.158)

(0.119)

Distributions

-

-

-

-

 

Lakeview Hotel Investment Corp is listed on the TSX Venture Exchange under the symbol "LHR".  Lakeview Hotel Investment Corp receives income from ownership, management and licensing of hotel properties.

The TSX Venture Exchange nor its Regulation Service Provider (as the term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Lakeview Hotel Investment Corp

View original content: http://www.newswire.ca/en/releases/archive/November2018/29/c5019.html

Avrum Senensky, Executive Vice President, Tel: (204) 947-1161, Fax: (204) 957-1697, Email [email protected] CNW Group 2018


Source: Canada Newswire (November 29, 2018 - 5:41 PM EST)

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