Temple REIT reports 2009 first quarter results



    WINNIPEG, May 27 /CNW/ - Temple Real Estate Investment Trust ("TREIT")
(TSX Venture: TR.UN) today reported its financial results for the quarter
ended March 31, 2009. The following comments in regard to the financial
position and operating results of TREIT should be read in conjunction with the
March 31, 2009 Management Discussion & Analysis and the financial statements
for the quarter ended March 31, 2009, which may be obtained from the TREIT
website at www.treit.ca or the SEDAR website at www.sedar.com.

    
    2009 FIRST QUARTER SUMMARY

    Property Portfolio

    -  The newest addition to the TREIT hotel portfolio, the Capri Centre in
       Red Deer, Alberta completed its first full quarter of operations,
       contributing $1.8 million to operating income.
    -  Invested approximately $0.2 million in property improvements
    -  Property portfolio at March 31, 2009 consisting of ten hotels,
       comprised of 1,173 rooms/suites, with an appraised value of
       $290.2 million

    Financial

    Q1 2009 compared to Q4 2008:

    -  Revenue per available room (RevPar) at the Fort McMurray properties
       decreased by 18.8% from $141.35 to $114.74
    -  RevPar at the other properties decreased by 19.1% from $96.85 to
       $78.36
    -  Operating income increased by $0.1 million or 2% to $6.78 million
    -  Operating profit margin of 39%, compared to 45% in Q4 2008
    -  Net income increased by $0.2 million (32.4%) to $0.8 million ($0.07
       per unit)
    -  Distributable income decreased by $0.3 million (10.0%) to $2.6 million
       or $0.20 per unit, representing a payout ratio of 98.3% for the
       quarter
    -  Funds from operations (FFO) decreased by $0.2 million (6.5%) to
       $2.9 million or $0.22 per unit, representing a payout ratio of 89.9%
       for the quarter

    Capital Structure

    -  Weighted average interest rate on the aggregate long-term debt of
       6.34% at March 31, 2009, unchanged from December 31, 2008
    -  Mortgage loan debt to appraised property value ratio of 57% at March
       31, 2009, based on appraisals completed for six properties (58% of
       total appraised value) in 2009, for two properties (25% of total
       appraised value) in 2008 and two properties (17% of total appraised
       value) completed in 2007
    

    The most positive aspect of the 2009 first quarter results is the
favourable impact of the Capri Centre on TREIT's operating results. The Capri
Centre, a full service hotel, trade and conference centre located in Red Deer,
Alberta, was acquired by TREIT on December 30, 2008. During the first quarter
of 2009, the operating income from the Capri Centre, combined with the
incremental income from the two other hotel acquisitions in 2008, effectively
offset the reduction in operating income from the other hotel properties in
Alberta. TREIT completed the first quarter of 2009 with operating income which
was $317,000 higher in comparison to the first quarter of 2008. In comparison
to the fourth quarter of 2008, the operating income increased by $163,000.

    
    FINANCIAL AND OPERATING STATISTICS
    -------------------------------------------------------------------------
                                               Three Months Ended
                                  -------------------------------------------
                                     March 31       March 31     December 31
                                  -------------------------------------------
                                       2009           2008           2008
                                  -------------------------------------------
     DISTRIBUTIONS
       Amount - total               $2,562,404     $2,373,014     $5,123,253
              - per unit                 $0.20          $0.24          $0.30

    BALANCE SHEET
      Total assets                $259,096,022   $200,238,463   $260,478,528
      Total long-term debt and
       convertible debentures     $186,991,157   $142,273,686   $187,941,446

    KEY PERFORMANCE INDICATORS
    Operations:
      Occupancy                         53.21%         76.78%         67.00%
      ADR                              $185.26        $187.66        $186.07
      RevPar                            $98.57        $144.08        $124.66
      Operating profit margin           39.25%         52.54%         45.23%

    Operating results:
      Total revenue                $17,268,422    $12,297,009    $14,624,757
      Operating income              $6,778,428     $6,461,380     $6,615,295
      Net income                      $838,375     $2,292,460       $633,348

    Cash flows:
      Distributable income          $2,605,579     $3,446,530     $2,896,458
      Funds from operations         $2,851,238     $3,571,889     $3,048,846

    Financing:
      Weighted average interest
       rate of long-term debt            6.34%          6.55%          6.34%

    Per Unit Amounts           Basic  Diluted  Basic  Diluted  Basic  Diluted
                               -----  -------  -----  -------  -----  -------

      Net income               $0.07   $0.07   $0.24   $0.24   $0.06   $0.04
      Distributable income     $0.20   $0.20   $0.36   $0.35   $0.25   $0.19
      Funds from operations    $0.22   $0.22   $0.37   $0.37   $0.27   $0.20



    DETAILED ANALYSIS OF QUARTERLY RESULTS

    Analysis of Net Income
    -------------------------------------------------------------------------
                                        Three Months Ended
                  -----------------------------------------------------------
                    March 31    March 31    Increase/  December 31  Increase/
                      2009        2008     (Decrease)      2008    (Decrease)
                  ----------- ----------- -----------  ----------- ----------

    Hotel revenue
    Room          $10,583,067 $10,386,769 $   196,298  $11,151,490 $(568,423)
    Other           5,969,028   1,353,477   4,615,551    2,723,443 3,245,585
                  ----------- ----------- -----------  ----------- ----------
      Total hotel
       revenue     16,552,095  11,740,246   4,811,849   13,874,933 2,677,162

    Interest and
     other income     716,327     556,763     159,564      749,824   (33,497)
                  ----------- ----------- -----------  ----------- ----------
      Total
       revenue     17,268,422  12,297,009   4,971,413   14,624,757 2,643,665

    Operating
     expenses      10,489,994   5,835,629   4,654,365    8,009,462 2,480,532
                  ----------- ----------- -----------  ----------- ----------
    Operating
     income         6,778,428   6,461,380     317,048    6,615,295   163,133

    Finance
     expense        3,680,200   2,746,841     933,359    3,210,504   469,696
    Trust expense     198,809     228,754     (29,945)     128,299    70,510
    Amortization    1,594,538   1,156,260     438,278    1,339,212   255,326
                  ----------- ----------- -----------  ----------- ----------
                    1,304,881   2,329,525  (1,024,644)   1,937,280  (632,399)
    Change in
     marketable
     securities       116,925           -     116,925      786,142  (669,217)
    Provision
     for taxes        349,581      37,065     312,516      517,790  (168,209)
                  ----------- ----------- -----------  ----------- ----------

    Net income    $   838,375 $ 2,292,460 $(1,454,085) $   633,348 $ 205,027
                  ----------- ----------- -----------  ----------- ----------
                  ----------- ----------- -----------  ----------- ----------
    

    Comparison to 2008 Q1 Results

    Excluding taxes and the change in marketable securities, TREIT completed
the first quarter of 2009 with income of $1.3 million compared to income of
$2.3 million during the first quarter of 2008, representing a decrease of $1.0
million.
    The decrease in income mainly reflects an increase in operating income
from hotel operations of $317,000 reduced by an increase in financing expense
of $933,000 and an increase in amortization expense of $438,000.
    In general terms, the increase in financing expense and amortization is
mainly attributable to the addition of the Capri Centre, while the modest
increase in operating income mainly reflects incremental income from the Capri
Centre almost fully offset by a decrease in operating income from the other
hotels.
    After providing for taxes and the change in marketable securities, TREIT
completed the first quarter of 2009 with income of $838,000, representing a
decrease of $1.45 million compared to the first quarter of 2008.

    Comparison to 2008 Q4 Results

    In comparison to the fourth quarter of 2008, income before taxes and the
change in marketable securities decreased by $632,000.
    The decrease mainly reflects an increase in operating income from hotel
operations of $163,000, reduced by an increase in financing expense of
$470,000 and an increase in amortization expense of $255,000.
    In general terms, the increase in financing expense and amortization is
mainly attributable to 2008 hotel acquisitions. The increase in operating
income also reflects incremental income from the 2008 hotel acquisitions,
however, the income from the new hotels is largely offset by a decrease in
operating income from the Fort McMurray hotel portfolio.
    After providing for taxes and the change in marketable securities, income
increased by $205,000 compared to the fourth quarter of 2008.

    OUTLOOK

    During 2009 and 2010, TREIT is planning major renovations or expansion
projects at three hotels:

    
    -  extensive hotel upgrades, consisting primarily of the refurbishment of
       guest rooms, are scheduled to commence at the Capri Centre during the
       second half of the year. In conjunction with the refurbishments, TREIT
       expects to licence the hotel with the Sheraton convention centre brand
       name.

    -  a $1.25 Million capital expenditure program, consisting primarily of
       the refurbishment of the rooms, restaurant and the banquet and
       conference facilities, is scheduled to commence at the Best Western
       Wayside Inn and Suites during the second half of the year.

    -  the 68-room expansion of the Merit Hotel is expected to be completed
       during the second half of 2009 at which time the contract price of
       $19,040,000, net of the initial deposit of $500,000, will be payable.
       The net amount owing will be partially satisfied by the issuance of a
       $4,500,000 4.5% Series C Convertible Debentures due December 31, 2014,
       with the remaining amount to be funded with additional mortgage loan
       financing.
    

    The capital expenditures, which are planned for 2009 - 2010, are
conditional upon TREIT achieving a sufficient level of operating cash flow
and/or obtaining additional mortgage loan financing to partially fund the
capital expenditures.
    The addition to the Merit Hotel combined with value-added capital
expenditures at other hotels is expected to further improve the income
potential and value of the property portfolio in 2010. Given the favourable
market positioning of the hotels located outside of Fort McMurray and the
likelihood that market conditions in Fort McMurray will recover, management
believes that TREIT offers potential for future growth.

    
    ABOUT TREIT
    -----------
    

    TREIT is a real estate investment trust, which is listed on the TSX
Venture Exchange under the symbols TR.UN (Trust Units), TR.DB.A (Series A
Convertible Debentures) and TR.DB.B (Series B Convertible Debentures). The
objective of TREIT is to provide Unitholders with stable cash distributions
from investment in a geographically diversified Canadian portfolio of hotel
properties and related assets. There are currently 12,825,352 trust units
outstanding. For further information on TREIT, please visit our website at
www.treit.ca.

    This press release contains certain statements that could be considered
as forward-looking information. The forward-looking information is subject to
certain risks and uncertainties, which could result in actual results
differing materially from the forward-looking statements.

    
    The TSX Venture Exchange has not reviewed or approved the contents of
    this press release and does not accept responsibility for the adequacy or
    accuracy of this press release.
    




For further information:

For further information: Arni Thorsteinson, Chief Executive Officer, or
Gino Romagnoli, Investor Relations, Tel: (204) 475-9090, Fax: (204) 452-5505,
Email: info@treit.ca


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