Apple Hospitality REIT, Inc (APLE) has reported a 70.84 percent plunge in profit for the quarter ended Sep. 30, 2016. The company has earned $13.69 million, or $0.07 a share in the quarter, compared with $46.97 million, or $0.27 a share for the same period last year.
Revenue during the quarter grew 14.93 percent to $276.47 million from $240.56 million in the previous year period.
Cost of revenue rose 18.61 percent or $19.52 million during the quarter to $124.42 million. Gross margin for the quarter contracted 140 basis points over the previous year period to 55 percent.
Total expenses were $252.63 million for the quarter, up 37.19 percent or $68.48 million from year-ago period. Operating margin for the quarter contracted 1483 basis points over the previous year period to 8.62 percent.
Operating income for the quarter was $23.84 million, compared with $56.41 million in the previous year period. However, the adjusted EBITDA for the quarter stood at $104.08 million compared with $90.56 million in the prior year period. At the same time, adjusted EBITDA margin was almost stable in the quarter to 37.65 percent when compared with the last year period.
Occupancy revenue was $255.27 million for the quarter, up 15 percent or $33.29 million. Revenue from other hotel operating activities was $21.20 million for the quarter, up 14.13 percent or $2.62 million from year-ago period.
Justin Knight, president and chief executive officer, commented, “We are pleased with the overall performance of our portfolio of hotels during the third quarter of this year. Amid a more moderate growth environment, our hotels delivered an increase in Comparable Hotels RevPAR of 1.5 percent and Adjusted EBITDA growth of 14.9 percent. With our successful completion of the merger with Apple REIT Ten during the quarter, we further enhanced our geographic reach and product focus which I believe will increase our opportunity for long-term outperformance in a period of general economic and lodging sector uncertainty.”
Total assets jumped 33.53 percent or $1,260.20 million to $5,018.69 million on Sep. 30, 2016. On the other hand, total liabilities were at $1,482.29 million as on Sep. 30, 2016, up 41.88 percent or $437.52 million from year-ago.
Return on assets moved down 102 basis points to 0.48 percent in the quarter. At the same time, return on equity moved down 134 basis points to 0.39 percent in the quarter.
Debt increases substantially
Total debt was at $1,349.18 million as on Sep. 30, 2016, up 39.92 percent or $384.93 million from year-ago. Shareholders equity stood at $3,536.40 million as on Sep. 30, 2016, up 30.32 percent or $822.68 million from year-ago. As a result, debt to equity ratio went up 3 basis points to 0.38 percent in the quarter.
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