Legacy Hotels posts loss on sale costs, tax charge
TORONTO, Aug 2 (Reuters) - Legacy Hotels Real Estate Investment Trust LGY_u.TO reported a second-quarter loss on Thursday due to legal costs related to the sale of the company and a noncash charge for future income taxes.
Legacy, owner of landmark Canadian hotels such as the Royal York in Toronto and Quebec City's Chateau Frontenac, said last month that a partnership headed by pension fund Caisse de depot et placement du Quebec will buy it it in a cash deal worth C$2.5 billion, including debt.
The Toronto-based trust reported a net loss of C$17.3 million ($16.4 million), or 15 Canadian cents a unit, for the quarter ended June 30, compared with a profit of C$13.3 million, or 15 Canadian cents a unit, in the year-before period.
It said its results reflect C$1.7 million of legal and advisory costs related to the company being acquired, as well as a noncash tax charge of C$35 million.
Revenue at Legacy, which has a portfolio of 25 hotels in Canada and the United States, increased 2.1 percent to C$230.7 million from C$225.9 million.
The jump in revenue was attributed to the addition of the Delta Bow Valley Hotel in Calgary, Alberta, in September of 2006.
Revenue per available room during the quarter slipped 0.5 percent to C$141.05 from C$141.73.
Revenue per available room is a combination of rate and occupancy and is considered a barometer for the industry.
"Looking ahead, overall lodging fundamentals remain positive, driven by expectations of further demand growth and limited near-term supply," said Neil J. Labatte, Legacy's president.
"Our recent announcement regarding the anticipated sale of the trust supports the continued investment demand for high quality hotel real estate investments and buyers' expectations of future growth within the industry, and our portfolio specifically."
Units of Legacy, which are up more than 30 percent in 2007, were down 2 Canadian cents, or 0.08 percent, at C$12.35 on the Toronto Stock Exchange on Thursday morning.
($1=$1.05 Canadian)
