Royal Host Real Estate Investment Trust

Royal Host Real Estate Investment Trust

May 12, 2009 03:21 ET

Royal Host REIT Announces First Quarter Results

CALGARY, ALBERTA--(Marketwire - May 12, 2009) - Royal Host Real Estate Investment Trust (TSX:RYL.UN)(TSX:RYL.DB.B)(TSX:RYL.DB.C)(TSX:RYL.DB.D) ("Royal Host" or the "Trust") today announced results for the three months ended March 31, 2009.

As a result primarily of a decline in occupancy, Royal Host reported a 10.2% decrease in hospitality revenue to $21.7 million and a $1.8 million decrease in hospitality gross margin to $3.1 million. Royal Host generated investment income of $3.2 million and reported a first quarter net loss of $1.6 million, or $0.07 per unit.

"Amid the challenges in the Canadian lodging sector, we are firmly committed to delivering Unitholders value," commented Brad Cann, Executive Vice President and Chief Financial Officer. "We have continued to respond to the decline in demand for accommodations by intensifying our focus on cost controls and revenue generation. We have maintained a strong balance sheet and enhanced our liquidity, yet have also taken advantage of compelling opportunities to repurchase our units and debentures."

Income from discontinued operations decreased to $nil (2008 - $12.1 million; due primarily to the recognition of an $11.7 million gain on sale in the first quarter of 2008). The Trust also recognized an other comprehensive loss of $8.0 million on its portfolio of marketable securities.

The Trust declared $3.3 million of monthly distributions to Unitholders, or $0.165 per unit. Royal Host continued to actively repurchase its securities during the quarter, deploying $3.5 million towards the repurchase of 1.2 million trust units (or approximately 6% of its outstanding units) and $1.5 million towards the repurchase of $2.2 million of its convertible debentures.

The following table highlights the Trust's financial results for the three months ended March 31, 2009.


Three months ended March 31
($000's, except as otherwise
noted) 2009 2008 Change(%)
Hospitality Revenue (Continuing
Operations) 21,684 24,151 (10.2)
Hospitality Expenses 18,622 19,281 (3.4)
Hospitality Gross Margin 3,062 4,870 37.1
Hospitality Gross Margin % 14.1% 20.2%
Investment Income 3,188 2,068 54.2
Other Expenses (7,732) (6,968) 11.0
Loss from Continuing Operations (1,482) (30)
Income (Loss) from Discontinued
Operations (69) 12,088
Net Income (Loss) (1,551) 12,058
Other Comprehensive Loss (7,979) (1,554)
Comprehensive Income (Loss) (9,530) 10,504
Basic Per Unit Net Earnings (Loss)($)
From Continuing Operations (0.07) -
From Discontinued Operations - 0.44
(0.07) 0.44

Distributable Income (92) 1,310
Monthly Distributions Declared 3,296 4,153 (20.6)
Basic Per Unit Distributable
Income ($) - 0.05 (100.0)
Per Unit Monthly Distributions
Declared ($) 0.165 0.165 -

Management of Royal Host will host an investor conference call on Wednesday, May 13, 2009 at 11:00 a.m. Eastern Time. The call may be accessed by dialing 1-416-642-5213 or 1-866-321-8231 and providing confirmation code 3238642. A recording of this call will be available shortly after the call until May 20, 2009. To access this recording please dial 1-647-436-0148 or 1-888-203-1112 and provide the playback passcode 3238642. Alternatively, a recording of the audio webcast will also be available on the Trust's website after May 15, 2009.

Royal Host is a uniquely diversified hospitality trust that delivers Unitholder value through hotel ownership, investment, management and franchising. Royal Host's portfolio of Canadian hotels operates under a variety of recognizable brands as well as a number of unbranded properties. The Trust's hotel portfolio is further enhanced by a stable franchising business, a successful hotel management operation, and a sizable portfolio of publicly-traded securities from within the hospitality and service sectors.

Royal Host trust units and convertible debentures are traded on the Toronto Stock Exchange under the trading symbols "RYL.UN", "RYL.DB.B", "RYL.DB.C" and "RYL.DB.D", respectively.

The above statements in regard to the financial results should be read in conjunction with Royal Host's unaudited consolidated financial statements for the three months ended March 31, 2009 and its management's discussion and analysis, which are available on Royal Host's website at as well as the SEDAR website at

This press release contains certain forward-looking statements relating, but not limited to, Royal Host's operations, anticipated financial performance, business prospects, and strategies. Forward-looking information typically contains statements with words such as "anticipate", "believe", "expect", "plan", or similar words suggesting future outcomes. Such forward-looking statements are subject to risks, uncertainties, and other factors, which could cause actual results to differ materially from future results expressed, projected, or implied by such forward-looking statements. Such factors include, but are not limited to economic, competitive, and lodging industry conditions. Royal Host disclaims any responsibility to update any such forward-looking statements except as required by law.

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