MISSISSAUGA, Ont. – Temple Hotels Inc. has reported a major first-quarter loss, mostly as a result of a huge asset impairment charge it blames on the continuing downturn in Alberta’s oilpatch.
The Ontario-based hotel operator said its net loss for the three months ended March 31 was $63.4 million, or 88 cents per diluted share, compared with a net loss of $4.8 million, or 11 cents per share, in the same year-earlier period.
The increase was mainly due to a non-cash asset impairment of $43.9 million, and an increase in deferred tax expense of $18.4 million and a decrease in operating income of $4.4 million
The 38.1 per cent decrease in operating income reflected a $2.9-million decrease in the Fort McMurray area and a $1.3-million decrease at other Alberta properties.
Net operating income elsewhere fell just 0.2 per cent.
Temple said it took a non-cash impairment charge of $43.9 million to reflect the impact of the economic downturn on the carrying value of 10 hotel properties, eight in Alberta and two elsewhere in Canada.
“Evidence that the occupancy and room rate declines may be prolonged as well as the lower common share trading price mandated the completion of an impairment review and recoverability analysis in accordance with IFRS (accounting rules),” it said.