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American Hotel Income Properties REIT LP Reports Third Quarter Results

Third quarter revenue more than doubles from same quarter last year – Third quarter FFO increases 93.0%; AFFO increases 87.6%

(All numbers are in U.S. dollars unless otherwise indicated)

American Hotel Income Properties REIT LP (TSX: HOT.UN) (TSX: HOT.DB.U), which has 115 select-service hotels located across the United States, announced today its financial results for the three and nine months ended September 30, 2017.

During the third quarter, revenues more than doubled, to $90.3 million, EBITDA rose by 107.6% to $30.1 million, funds from operations (“FFO“) increased by 93.0% to $19.3 million, while adjusted funds from operations (“AFFO“) rose 87.6% to $16.7 million, in each case, as a result of the addition of new hotels.

“Our third quarter results reflect the impact of the 33 premium branded hotels we acquired in the last 12 months, which improved the geographic diversification of our properties and supported our overall RevPAR growth of 25.2%. Revenue and EBITDA more than doubled from the same quarter last year, while our payout ratio improved to 76%,” said Rob O’Neill, CEO, AHIP. “Our recently announced agreement with Wyndham to rebrand 46 of our Rail Hotels will further bolster our occupancy rates and complement our rail crew contract revenue by leveraging Wyndham’s strong reservations network, brand recognition and customer rewards program to increase the productive capacity of our unused Rail Hotel guestrooms. We believe the incremental revenue and earnings accretion from this strategy will enhance the margins of our Rail Hotel Portfolio and create additional value for our Unitholders.”

Ian McAuley, President of AHIP added, “During the third quarter our Hotel Manager and their dedicated hotel staff successfully navigated the surge of guests seeking accommodation in Florida during Hurricane Irma. We are grateful to confirm that our properties sustained only minor damage due to the storm and would like to thank our hotel guests for their confidence and business during that challenging time. The increased occupancy rates at several of our Florida hotels, provided a strong contribution to our third quarter performance.”

Mr. McAuley continued: “To better cater to our unitholders’ needs and provide more clarity in a changing currency environment, we are pleased to announce the addition of a new U.S. dollar ticker (HOT.U), that will trade alongside our existing Canadian dollar ticker (HOT.UN) on the TSX. This new investment option will provide our unitholders with the choice of investing in either currency, and will also provide our unitholders with a unit price benchmark resistant to Canadian and U.S. dollar foreign exchange impacts. The new ticker will begin trading on the TSX on November 10, 2017.”

THREE MONTHS ENDED SEPTEMBER 30, 2017 FINANCIAL HIGHLIGHTS

NINE MONTHS ENDED SEPTEMBER 30, 2017 FINANCIAL HIGHLIGHTS

THIRD QUARTER DEVELOPMENTS

SUBSEQUENT EVENTS

ABOUT AMERICAN HOTEL INCOME PROPERTIES REIT LP

American Hotel Income Properties REIT LP (TSX: HOT.UN) (TSX: HOT.DB.U), or AHIP, is a limited partnership formed to invest in hotel real estate properties located substantially in the United States. AHIP currently has 115 hotels, and is actively engaged in growing its portfolio of premium branded, select-service hotels in larger secondary markets that have diverse and stable demand. AHIP hotels operate under brands affiliated with Marriott, Hilton, IHG, Wyndham and Choice Hotels through license agreements. The company’s long-term objectives are to build on its proven track record of successful investment, deliver reliable and consistent U.S. dollar denominated distributions to unitholders, and generate value through the continued growth of its diversified hotel portfolio.

   
   
THIRD QUARTER HIGHLIGHTS AND KEY PERFORMANCE INDICATORS  
   
(US$000s unless noted and except per Unit amounts)   Three months ended September 30, 2017     Three months ended September 30, 2016     Nine months ended September 30, 2017     Nine months ended September 30, 2016  
                                 
Number of rooms (1)     11,570       7,119       11,570       7,119  
Number of properties (1)     113       80       113       80  
Number of restaurants (1)     41       31       41       31  
                                 
Occupancy rate     77.9 %     75.5 %     75.4 %     72.8 %
Average daily room rate   $ 99.16     $ 81.72     $ 95.54     $ 83.05  
Revenue per available room   $ 77.25     $ 61.70     $ 72.04     $ 60.46  
                                 
Revenues   $ 90,311     $ 44,508     $ 221,488     $ 129,169  
Net operating income   $ 34,018     $ 17,261     $ 80,604     $ 49,354  
Net income and comprehensive income   $ 8,816     $ 3,880     $ 5,702     $ 5,882  
                                 
EBITDA   $ 30,099     $ 14,460     $ 69,326     $ 40,283  
EBITDA Margin %     33.3 %     32.5 %     31.3 %     31.2 %
                                 
Funds from operations (FFO)   $ 19,306     $ 10,023     $ 45,429     $ 27,686  
Diluted FFO per Unit   $ 0.25     $ 0.24     $ 0.68     $ 0.74  
                                 
Adjusted funds from operations (AFFO)   $ 16,653     $ 8,874     $ 38,986     $ 24,284  
Diluted AFFO per Unit   $ 0.21     $ 0.21     $ 0.58     $ 0.65  
                                 
Distributions declared   $ 12,669     $ 7,323     $ 32,759     $ 18,724  
AFFO Payout Ratio     76.1 %     82.5 %     84.0 %     77.1 %
                                 
Debt-to-Gross Book Value (1)     53.7 %     43.9 %     53.7 %     43.9 %
Debt-to-EBITDA (2)     9.3x       6.1x       9.3x       6.1x  
Interest Coverage Ratio     3.6x       4.0x       3.4x       3.8x  
Weighted average loan face interest rate (1)     4.61 %     4.56 %     4.61 %     4.56 %
Weighted average loan term to maturity (1)     7.8 years       7.5 years       7.8 years       7.5 years  
                                 
Number of Units outstanding (1)     78,033,606       45,086,159       78,033,606       45,086,159  
Diluted weighted average number of Units outstanding     78,253,220       42,483,493       66,853,148       37,537,524  
                                 
Same property Occupancy rate (3)     76.5 %     75.5 %     74.2 %     72.9 %
Same property Average daily room rate (3)   $ 79.43     $ 82.09     $ 80.04     $ 83.24  
Same property RevPAR (3)   $ 60.76     $ 61.98     $ 59.39     $ 60.68  
Same property Revenues (3)   $ 42,709     $ 43,416     $ 123,484     $ 125,896  
Same property Net operating income (3)   $ 14,827     $ 16,291     $ 42,452     $ 46,812  
Same property NOI Margin % (3)     34.7 %     37.5 %     34.4 %     37.2 %
                                 

(1) At period end.
(2) Aggregate amount of debt at face value divided by annualized EBITDA.
(3) Same-property metrics only represent 71% of AHIP’s hotels for Q3 2017 (as at Sept. 30, 2017)

Posted by on November 9, 2017.

Categories: Financial

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