TORONTO, ONTARIO -- (Marketwired) -- 05/10/13 -- InnVest Real Estate Investment Trust ("InnVest") (TSX: INN.UN), today announced financial results for the three months ended March 31, 2013. All dollars are in thousands of Canadian dollars unless otherwise specified.
"We are making progress against our strategic plan to improve our portfolio quality and strengthen our balance sheet. So far this year, we have actively planned and rolled out several capital investment projects including the revitalization program of our Comfort Inns. In addition, we have sold or entered into firm commitments to sell over $80 million in sales of non-core assets," said Anthony Messina, InnVest's President and Chief Executive Officer. "First quarter performance saw a shift in demand to the second quarter owing to the timing of Easter this year. Looking ahead, fundamentals for our portfolio are positive, driven by a favourable industry outlook, upside from capital investments and our ability to accretively redeploy capital from asset sales to higher return alternatives."
First Quarter Highlights
-- Raised $115.0 million of Series G - 5.75% convertible debentures and called $75.0 million of 6.0% Series B convertible debentures for early redemption on April 1, 2013. InnVest has no debt maturity until March 2014;-- Completed the sale of one non-core hotel (gross proceeds of $10.0 million) and entered into firm commitments for the sale of two additional properties (gross proceeds of $71.6 million) which are expected to close in the second quarter;-- Revenue per available room ("RevPAR") on a same-hotel basis decreased 1.0% with demand shifting to the second quarter highlighted by RevPAR growth of approximately 9% in April;-- First quarter results include a one-time restructuring charge of $1.3 million. Excluding this charge, gross operating profit ("GOP") declined $2.4 million to $13.4 million owing to the RevPAR decline and the high fixed cost level in this low occupancy period;-- Realized an adjusted net loss of $4.0 million compared to $2.4 million in the prior year (excludes non-cash items (unrealized losses on liabilities presented at fair value, deferred income taxes, the gain on hotel sale and depreciation and amortization) and the non-recurring restructuring charge). This compares to the presented net loss of $41.7 million compared to a net loss of $30.2 million in the prior year;-- Funds from operations and distributable loss each declined primarily reflecting the RevPAR decline and the impact of the one-time restructuring charge; and-- Invested $5.8 million with additional capital commitments of $12.8 million as at the end of the quarter.
The first quarter is historically InnVest's lowest earnings period. Given the seasonality of the portfolio, the first quarter is not reflective of anticipated results for the annual period. Revenues are typically higher in the second and third quarters due to business and leisure travel trends as compared to the first and fourth quarters.
InnVest's Condensed Interim Consolidated Financial Statements and Management's Discussion and Analysis for the three months ended March 31, 2013 and 2012 are available on InnVest's website at www.innvestreit.com.