Hersha Hospitality Trust (HT) swung to a net profit for the quarter ended Mar. 31, 2017. The company has made a net profit of $24.77 million, or $ 0.44 a share in the quarter, against a net loss of $7.73 million, or $0.26 a share in the last year period. Revenue during the quarter went up marginally by 1.06 percent to $108 million from $106.87 million in the previous year period.
Cost of revenue for the quarter was almost stable at $74.89 million, when compared with the previous year period. Gross margin for the quarter expanded 71 basis points over the previous year period to 30.65 percent.
Total expenses were $100.49 million for the quarter, down 2.19 percent or $2.25 million from year-ago period. Operating margin for the quarter expanded 309 basis points over the previous year period to 6.95 percent.
Operating income for the quarter was $7.51 million, compared with $4.14 million in the previous year period. However, the adjusted EBITDA for the quarter stood at $30.32 million compared with $29.78 million in the prior year period. At the same time, adjusted EBITDA margin improved 21 basis points in the quarter to 28.08 percent from 27.86 percent in the last year period.
For fiscal year 2017, Hersha Hospitality Trust expects net income to be in the range of $79 million to $89 million. For financial year 2017, the company forecasts diluted earnings per share to be in the range of $1.86 to $2.10.
Other income during the quarter was $0.05 million, up 100 percent or $0.02 million from year-ago period.
Mr. Jay H. Shah, Hersha’s chief executive officer, stated, “During the first quarter, Hersha remained very active with its capital recycling strategy, continuing to improve the Company’s high-quality, transient-focused portfolio and positioning it for strong growth. In early January, we closed on the sale of two suburban Washington, DC properties for $62.0 million, and agreed to a 6-month extension to close on the sale of three suburban West Coast hotels for $130.5 million, a $7.5 million increase from the original purchase price. We also entered the dynamic Seattle market through the purchase of the Forbes Four Star, AAA Four-Diamond Pan Pacific Hotel, and capitalized on market dislocation in Miami by acquiring The Ritz-Carlton, Coconut Grove at a very attractive basis. Finally, we liquidated our Mystic joint-venture, adding the high-quality Mystic Marriott Hotel & Spa to our consolidated hotel portfolio and further simplifying our balance sheet.
Net receivables were at $29.34 million as on Mar. 31, 2017, up 77.26 percent or $12.79 million from year-ago.
Real estate investments stood at $2.86 million as on Mar. 31, 2017.
Total assets went up marginally by 1.69 percent or $35.20 million to $2,124.04 million on Mar. 31, 2017. On the other hand, total liabilities were at $1,234.51 million as on Mar. 31, 2017, down 12.15 percent or $170.68 million from year-ago.
Return on assets moved up 150 basis points to 1.69 percent in the quarter. Return on equity was at 2.11 percent in the quarter against a negative 1.66 percent in the last year period.
Debt comes down
Total debt was at $1,070.33 million as on Mar. 31, 2017, down 15.89 percent or $202.19 million from year-ago. Shareholders equity stood at $889.53 million as on Mar. 31, 2017, up 30.12 percent or $205.88 million from year-ago. As a result, debt to equity ratio went down 66 basis points to 1.20 percent in the quarter.
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