Lakeview Hotel REIT Reports 3rd quarter Financial Results

/NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTIBUTION TO U.S. NEWS WIRE SERVICES/

WINNIPEG, Nov. 29, 2011 /CNW/ - Lakeview Hotel Real Estate Investment Trust ("Lakeview REIT") is pleased to report its financial results for the quarter ended September 30, 2011.  The following comments in regard to the financial results should be read in conjunction with the September 30, 2011 financial statements and Management Discussion and Analysis which are available on the SEDAR website www.sedar.com and the Lakeview REIT website www.lakeviewreit.com.

During the third quarter of 2011 Lakeview REIT enjoyed exceptional year-over-year revenue growth.  Hotel occupancies increased from 61.36% in the third quarter of 2010 to 72.39% in the third quarter of 2011.  Year-over-year the RevPar increased by 12.8%.  Overall revenues increased by 16% or $1.6 million.  RevPar for the quarter was the highest quarterly RevPar achieved by the REIT in five years.  Positive net income was generated for the first time since the third quarter of 2008.

There has been an almost complete reversal of the conditions that led to the earlier decline in revenues for Lakeview REIT.  Regulatory changes and royalty changes in Western Canada combined with technological improvements which have made previously abandoned or never drilled fields financially viable have set off a new boom in drilling activity.  Lakeview REIT has been a major benefactor of that activity with hotels in many resource driven Western Canadian markets.

Markets experiencing exceptional improvements in operating results in the third quarter of 2011 included Drayton Valley, Slave Lake and Edson, Alberta and Fort Saint John, British Columbia.  In recent months there has been a near complete reversal of fortunes in these markets.

Business in the fourth quarter has continued to be robust, significantly greater than the levels achieved in the fourth quarter of 2011.  The forecast for drilling activity remains very strong going into 2012, boding very well for the prospects for Lakeview REIT.

Following is a comparison of the operating results for the three and nine months ended September 30, 2011 and the three and nine months ended September 30, 2010:

  Three months ended
September 30
Nine months ended
September 30
  2011 2010 2011 2010
Hospitality Revenue        
  Room 10,026,865 8,814,503 26,327,392 23,157,362
  Food & Beverage 906,085 667,594 2,485,052 2,080,165
  Other 628,385 478,895 1,797,349 1,435,253
Total Revenue 11,561,335 9,960,992 30,609,793 26,672,780
Expenses 11,248,158 12,238,721 32,523,161 32,795,938
Net Income (Loss) 313,177 (2,277,729) (1,913,368) (6,123,158)
Basic and diluted income (loss) before income tax per unit 0.016 (0.116) (0.098) (0.313)
Reconciliation to funds from Operations   -   -
Add (deduct)        
Amortization of income properties 1,359,795 1,566,450 4,217,033 4,784,592
Amortization of franchise fees and licenses 5,076 8,734 20,284 26,202
Provision for impairment of note receivable - 1,396,062 - 1,396,062
Compensation Costs of Unit Options - 124,000 - 124,000
Distributions from Lakeview Flag Licensing General Partnership 110,250 362,600 406,455 411,600
Distributions from Lakeview Flag Management General Partnership 160,000 130,000 263,250 130,000
Income from Lakeview Flag Licensing General Partnership (181,830) (154,583) (466,119) (397,687)
Income from Lakeview Flag Management General Partnership (133,076) (116,327) (352,098) (310,931)
Recovery of impaired amounts previously written off (106,069) - (283,795) -
Funds from Operations 1,527,323 1,039,207 1,891,642 40,680
Basic and diluted funds from Operations per unit 0.078 0.053 0.097 0.002
Contributions to reserve account (538,331) (232,505) (906,590) (570,879)
Adjusted funds from Operations 988,992 806,702 985,052 (530,199)
Basic and diluted adjusted funds from Operations per unit 0.051 0.041 0.050 (0.027)
Reconciliation to distributable income        
Accretion on debt component of convertible debentures 340,467 300,465 981,979 868,532
Accretion of debentures 57,466 51,717 167,954 151,150
Accretion of mortgages payable 63,142 63,143 178,412 190,138
Gain on disposal of income properties (24,276) - (6,983) -
Distributable income 1,425,791 1,222,027 2,306,414 679,621
Basic and diluted distributable income per unit 0.073 0.062 0.118 0.035
Distributions - - - -
         

Lakeview REIT is a real estate investment trust, which is listed on the TSX Venture Exchange under the symbol "LHR.UN".  Lakeview REIT receives income from ownership, management and licensing of hotel properties.  For further information on Lakeview REIT please visit our website www.lakeviewreit.com.

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 Real Estate Investment Trust

For further information:

Keith Levit, President, or Avrum Senensky, Executive Vice President
Tel: (204) 947-1161, Fax: (204) 957-1697, Email asenensky@lakeviewhotels.com

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Lakeview Hotel Real Estate Investment Trust

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