Lakeview Hotel Investment Corp Announces Third Quarter Results

WINNIPEG, Nov. 29, 2018 /CNW/ - Lakeview Hotel Investment Corp ("LHIC") is pleased to report its financial results for the Quarter ended September 30, 2018.  The following comments in regard to the financial results should be read in conjunction with the September 30, 2018 financial statements and Management Discussion and Analysis which are available on the SEDAR website www.sedar.com.

The 3rd quarter of 2018 was a challenging one for Lakeview Hotel Investment Corp as Alberta struggled with a precipitous decline in oil prices.  The spread between West Texas Intermediate (WTI) and Western Canada Select (WCS) oil prices reached the largest levels in history, largely due to transportation constraints in getting Alberta oil to market. While WTI traded at well north of $60 per barrel, the price that oil producers in Alberta were selling oil for dropped under $20 per barrel.  There does not appear to be a near term solution to this problem.  The Alberta Government would like to see a sharp increase in rail capacity to provide some near term relief.  The Federal Government does not support this approach and would rather see a long term solution to the problem through an increase in pipeline capacity.  In the meantime oil prices languish in Alberta.   As a result of the extremely low price of WCS activity in the oil patch was unusually slow during what is typically a very robust period.  This directly impacted occupancy levels at many of the hotels in the Lakeview portfolio.

Major projects that have been announced unrelated to the delivery of oil should in the future significantly benefit many of Lakeview's hotels.  These projects include a $40 billion LNG Canada project in Kitimat, the $10.7 billion site C dam in Fort Saint John and the $3.5 billion Heartland Petrochemical Complex in Strathcona.   All are expected to contribute to improved operating results going forward.  The most immediate results are expected from the Heartland project which should be moving forward at full speed in 2019.  This should have a very positive impact on the property in Fort Saskatchewan.

Focused sales efforts that began at the Calgary property and have been extended to other hotels in the Lakeview Hotel Investment Corp portfolio are anticipated to positively impact results going forward.

Following is a comparison of the operating results for the three and nine months ended September 30, 2018 and the comparable period in 2017:

	Three months ended		Nine months ended
	September 30		September 30
	2018	2017	2018	2017
Hospitality Revenue
Room	4,637,703	5,483,429	11,284,876	13,698,645
Food & Beverage	554,738	601,087	1,721,228	1,824,025
Other	303,797	316,192	758,187	838,389
Total Revenue	5,496,238	6,400,708	13,764,291	16,361,059
Expenses	6,328,625	6,478,009	18,229,490	18,971,796
(Loss) Gain on sale of income properties	-	(39,443)	6,728	(24,342)
Net income (loss)	(832,387)	(116,744)	(4,458,471)	(2,635,079)
Basic and diluted income (loss) before income tax per share	(0.043)	(0.006)	(0.228)	(0.135)
Reconciliation to funds from operations
Add (deduct)
Amortization of income properties	475,474	508,996	1,419,126	1,551,244
Amortization of franchise fees	375	374	1,123	1,122
Loss (Gain) on sale of income properties	-	39,443	(6,728)	24,342
Distributions from Lakeview Flag Management General Partnership	-	-	-	18,000
Income from Lakeview Flag Licensing General Partnership	(135,558)	(149,964)	(323,708)	(379,005)
Income from Lakeview Flag Management General Partnership	(63,371)	(73,136)	(158,076)	(186,596)
Unrealized loss (gain) on change in fair value of interest rate swap	(74,707)	(324,718)	(143,155)	(797,388)
Funds from operations	(630,174)	(115,749)	(3,669,889)	(2,403,360)
Basic and diluted funds from operations per share	(0.032)	(0.006)	(0.188)	(0.123)
Contributions to reserve account	(108,052)	(126,279)	(256,744)	(318,332)
Adjusted funds from operations	(738,226)	(242,028)	(3,926,633)	(2,721,692)
Basic and diluted adjusted funds from operations per share	(0.038)	(0.012)	(0.201)	(0.139)
Reconciliation to distributable income
Loss on derecognition of income properties	7,279	2,075	8,582	15,105
Loss on modification of financial liability	-	-	35,441	-
Accretion of debentures	141,593	43,274	488,568	128,217
Accretion of mortgage payable	1,145	1,122	3,381	3,438
Accretion of other long-term debt	101,147	84,524	297,556	254,730
Distributable income	(487,062)	(111,033)	(3,093,105)	(2,320,202)
Basic and diluted distributable income per share	(0.025)	(0.006)	(0.158)	(0.119)
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]

Related Links

http://www.lakeviewhotels.com