/NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTIBUTION TO U.S. NEWS WIRE SERVICES/
WINNIPEG, Aug. 28, 2012 /CNW/ - Lakeview Hotel Real Estate Investment Trust ("Lakeview REIT") is pleased to report its financial results for the quarter ended June 30, 2012. The following comments in regard to the financial results should be read in conjunction with the June 30, 2012 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.
Second quarter results are always challenging to forecast due to the unpredictable nature of the spring break up period and road restrictions in Alberta and British Columbia. A small increase in revenues over the previous year was anticipated. Revenues for the quarter related to hotel operations were in fact up marginally. Room revenues increased $14,105 over the second quarter of 2011. Food & Beverage revenues increased $250,432. Total revenues were down marginally from $9.42 million to $9.39 million. The small decrease in total revenues related to the recovery of monies on a note receivable reported in the second quarter of 2011.
Even with the small decline in total revenues, bottom line operating results were much improved. Funds from Operations increased by $461,677 from ($92,588) to $369,089. Adjusted Funds from Operations increased by $426,878 from ($279,001) to $147,877.
For the six months ended June 30, 2012, Lakeview REIT generated $1,151,302 of Adjusted Funds from Operations and $1,775,888 of Distributable Income. At this time, management of Lakeview REIT intends to use any surplus cash flow to reduce liabilities of the REIT and for capital improvements to its properties.
Drilling activity in Western Canada has continued at lower than expected levels into the third quarter of 2012. This has primarily been a result of very wet conditions in the field but has also been adversely impacted by natural gas prices resulting in a curtailment of drilling activity in some specific markets. This reduced activity will impact occupancy levels at many of the REIT's hotels. Lakeview REIT anticipates third quarter revenues to be flat or down from the third quarter of 2011. Expectations are in place however for stronger results in the fourth quarter of 2012 with results continuing to improve into the New Year.
Following is a comparison of the operating results for the three and six months ended June 30, 2012 and the three and six months ended June 30, 2011:
| Three months ended
| Six months ended
|Food & Beverage||1,032,563||782,130||2,058,237||1,578,967|
|Basic and diluted income (loss) before income tax per unit||(0.052)||(0.058)||(0.107)||(0.114)|
|Reconciliation to funds from Operations|
|Amortization of income properties||1,178,515||1,415,694||2,389,809||2,857,238|
|Amortization of franchise fees and licenses||5,077||7,099||10,154||15,208|
|Loss on restructuring of convertible debentures||-||-||928,590||-|
|Distributions from Lakeview Flag Licensing General Partnership||78,400||37,485||277,830||296,205|
|Distributions from Lakeview Flag Management General Partnership||346,250||-||561,500||103,250|
|Income from Lakeview Flag Licensing General Partnership||(135,588)||(136,443)||(295,575)||(284,289)|
|Income from Lakeview Flag Management General Partnership||(108,029)||(106,504)||(230,015)||(219,022)|
|Recovery of impaired amounts previously written off||-||(177,726)||-||(177,726)|
|Compensation costs of unit options||16,800||-||16,800||-|
|Funds from Operations||369,089||(92,588)||1,569,918||364,319|
|Basic and diluted funds from Operations per unit||0.019||(0.005)||0.080||0.019|
|Contributions to reserve account||(221,212)||(186,413)||(418,616)||(368,259)|
|Adjusted funds from Operations||147,877||(279,001)||1,151,302||(3,940)|
|Basic and diluted adjusted funds from Operations per unit||0.008||(0.014)||0.059||(0.000)|
|Reconciliation to distributable income|
|Accretion on debt component of convertible debentures||97,169||321,671||370,481||641,512|
|Accretion of debentures||31,134||55,972||62,122||110,488|
|Accretion of mortgages payable||78,927||51,420||189,813||115,270|
|Loss on disposal of income properties||2,170||-||2,170||17,293|
|Basic and diluted distributable income per unit||0.018||0.008||0.091||0.045|
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 [email protected]