Lakeview Hotel Investment Corp Announces Second Quarter Results

WINNIPEG, Aug. 29, 2016 /CNW/ - Lakeview Hotel Investment Corp ("LHIC") is pleased to report its financial results for the Quarter ended June 30, 2016.  The following comments in regard to the financial results should be read in conjunction with the June 30, 2016 financial statements and Management Discussion and Analysis which are available on the SEDAR website www.sedar.com.

Lakeview Hotel Investment Corp. continues to face a challenging operating environment with a struggling Alberta economy and low commodity prices.  There is, however, growing optimism that the worst is now behind us.  Oil prices have begun to rebound and are now well above the January low of $27.82 per barrel.  Forecasters seem much more confident that prices will be over $50 per barrel for some if not most of 2017.  At these price levels, drilling activity in Alberta is expected to be more robust.  Even in our hardest hit market of Drayton Valley, Alberta we are starting to see the resumption of some preliminary site work and geological investigation.

Lakeview Hotel Investment Corp's cash flow remains negative, but has sufficient capital to meet all of its obligations into 2017.   Lakeview is taking all reasonable measures that it can to improve its cash flows until market conditions improve.  These measures include, among other things, operational efficiencies, debt restructuring and, as and when necessary, strategic disposition of assets. 

Following is a comparison of the operating results for the three and six months ended June 30, 2016 and the comparable period in 2015:

		Three months ended		Six months ended
		June 30,		June 30,
		2016	2015	2016	2015
Hospitality Revenue
	Room	4,869,360	6,147,647	9,300,783	13,046,628
	Food & Beverage	702,715	936,497	1,427,393	1,974,599
	Other	305,700	394,597	599,807	811,292
Total Revenue		5,877,775	7,478,741	11,327,983	15,832,519
Expenses		(7,246,506)	(8,081,923)	(14,709,400)	(17,841,767)
Gain on sale of income properties		2,734,149	-	2,734,149	-
Net income (Loss)		1,365,418	(603,182)	(647,268)	(2,009,248)
Basic and diluted income (loss) before income tax per share		0.07	(0.031)	(0.033)	(0.103)
Reconciliation to funds from Operations
Add (deduct)
Amortization of income properties		654,704	762,421	1,384,573	1,521,727
Amortization of franchise fees		919	1,192	2,111	2,384
Gain on sale of income properties		(2,734,149)	-	(2,734,149)	-
Distributions from Lakeview Flag Licensing General Partnership		-	26,950	-	147,980
Distributions from Lakeview Flag Management General Partnership		-	27,000	-	127,250
Income from Lakeview Flag Licensing General Partnership		(110,723)	(134,849)	(212,382)	(277,573)
Income from Lakeview Flag Management General Partnership		(67,743)	(85,279)	(130,370)	(180,364)
Unrealized loss on change in fair value of interest rate swap		(122,471)	(264,618)	11,709	812,048
Amortization of discount on bankers' acceptance		-	-	168,066	198,712
Funds from Operations		(1,014,045)	(270,365)	(2,157,710)	342,916
Basic and diluted funds from Operations per share		(0.052)	(0.014)	(0.11)	0.018
Contributions to reserve account		(102,105)	(229,820)	(201,758)	(388,117)
Adjusted funds from Operations		(1,116,150)	(500,185)	(2,359,468)	(45,201)
Basic and diluted adjusted funds from Operations per share		(0.057)	(0.026)	(0.121)	(0.002)
Reconciliation to distributable income
Accretion of debentures		20,375	39,433	40,257	79,081
Accretion of mortgages payable		23,518	22,741	47,973	47,496
Loss on derecognition of income properties		2,136	10,124	2,136	16,905
Loss on derecognition of Franchise Fees		2,726	-	2,726	-
Loss on derecognition of Financial Liability		19,804	-	19,804	-
Accretion of other long-term debt		52,487	46,377	104,114	100,688
Distributable income		(995,104)	(381,510)	(2,142,458)	198,969
Basic and diluted distributable income per share		(0.051)	(0.020)	(0.11)	0.01
Distributions			-		-

Lakeview Hotel Investment Corp is listed on the TSX Venture Exchange under the symbol "LHR".  Lakeview Hotel Investment Corp receives income from ownership, management and licensing of hotel properties. 

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 Investment Corp

Avrum Senensky, Executive Vice President, Tel: [phone], Fax: [phone], Email [email protected]