HALIFAX – Royal Host Inc. (TSX:RYL) lost $436,000 in its fourth quarter, almost 90 per cent less than a year earlier, as the hotel management company worked to cut costs and focus its business.
On a per-share basis, Royal Host said Tuesday it lost three cents in the quarter ended Dec. 31 compared with a loss of $4.1 million or 23 cents per share in the fourth quarter of 2012.
Hospitality revenue was $16.7 million down from $18.5 million in the last three months of 2012.
The company said it has reduced costs at both the hotel and corporate level, improving margins on its remaining revenue.
“Royal Host had such fundamental issues; its cost structure was too high, it had not made changes to its employment practices and operational processes, it was paying too much in interest expense and it wasn’t investing sufficient sums in its core properties,” the company said in a statement.
“These are all issues that can be fixed and the company has started to do exactly that with results that are only starting to appear in the financial statements.”
For the year as a whole, Halifax-based Royal Host lost $1.46 million or nine cents per share, down from a loss of $8.26 million or 47 cents per share in 2012.
Hospitality revenue for the full year totalled $69.8 million, down from $76.2 million.
Royal Host said the decline was mostly due to the sale of six hotels since March 2012, which contributed $4.7 million of revenue in 2012, as well as a 3.8 per cent less food and beverage revenue at comparable locations.
Last month, Royal Host also sold two select service hotels and used the proceeds to reduce its debt.
The company said it does not expect any more hotel sales this year.
Royal Host owns 17 hotels across Canada as well as the Travelodge Canada franchise business which is comprised of more than 90 hotels across the country.