Apple Hospitality REIT(US:APLE)2023-08-03 20:18Financial Performance - Total revenue for the three months ended June 30, 2023, was $361.63 million, a 7.1% increase from $337.67 million in the same period of 2022[79]. - Net income adjusted for hotel operations was $65.29 million for the three months ended June 30, 2023, compared to $65.35 million in the same period of 2022, reflecting a slight decrease of 0.1%[79]. - For the six months ended June 30, 2023, total revenue reached $673.1 million, up 12.5% from $598.1 million in 2022[84]. - Net income for the three months ended June 30, 2023, was $65,289, compared to $65,345 for the same period in 2022, reflecting a slight decrease of 0.09%[99]. - Funds from Operations (FFO) for the three months ended June 30, 2023, was $110.5 million, compared to $109.9 million in 2022[95]. - Modified Funds from Operations (MFFO) for the three months ended June 30, 2023, was $111.4 million, slightly up from $110.8 million in 2022[94]. - Adjusted EBITDA for the six months ended June 30, 2023, increased to $224,432, up from $204,506 in the same period of 2022, representing a growth of 9.7%[99]. Hotel Operations - As of June 30, 2023, the company owned 220 hotels with a total of 28,929 rooms, an increase from 219 hotels and 28,748 rooms as of June 30, 2022[72][77]. - Average daily rate (ADR) increased to $160.98 for the three months ended June 30, 2023, up 5.0% from $153.35 in the same period of 2022[79]. - Occupancy rate improved to 78.2% for the three months ended June 30, 2023, compared to 77.9% in the same period of 2022, marking a 0.4% increase[79]. - Revenue per available room (RevPAR) rose to $125.96 for the three months ended June 30, 2023, a 5.5% increase from $119.41 in the same period of 2022[79]. - Comparable Hotels achieved a RevPAR of $125.64 for the three months ended June 30, 2023, representing an increase of 5.3% compared to $119.28 in 2022[85]. - Hotel operating expenses increased to $200.51 million for the three months ended June 30, 2023, a 9.9% increase from $182.52 million in the same period of 2022[79]. - Hotel operating expenses for the three months ended June 30, 2023, totaled $200.5 million, accounting for 55.4% of total revenue, compared to 54.1% in 2022[86]. Acquisitions and Expansion - The company completed the acquisition of a 154-room Courtyard in Cleveland, Ohio for $31.0 million in 2023[73]. - The company has contracts for the potential purchase of two hotels in Madison, Wisconsin, and Nashville, Tennessee, for a total of approximately $175.3 million, with expected completion dates in early 2024 and 2025[74]. - The company has completed acquisitions and openings of multiple hotels across various states, including 130 rooms in San Juan Capistrano and 155 rooms in Santa Ana[108]. - The company has expanded its portfolio with new properties such as 221 rooms in Denver and 149 rooms in Boca Raton, enhancing its market presence[108]. - The company is focusing on expanding its footprint in Florida, with multiple new openings in cities like Miami and Tampa, indicating a strategic market expansion[108]. - The company has a robust pipeline of new developments, with several properties set to open in the coming years, enhancing its competitive edge[110]. Financial Position and Debt - As of June 30, 2023, the company had total outstanding debt of $1.4 billion, which includes $287.5 million in mortgage debt and $1.1 billion under unsecured credit facilities[117]. - The company had available corporate cash on hand of approximately $6.4 million and unused borrowing capacity under its Revolving Credit Facility of approximately $626.0 million[117]. - The company plans to spend approximately $70 million to $80 million on capital improvements during 2023, including renovations for 20 to 25 properties[126]. - The Company has outstanding contracts for the potential purchase of two hotels for a total combined purchase price of approximately $175.3 million, with expected completion dates in early 2024 and 2025[128]. - Approximately $299.0 million, or 21% of the Company's total debt, was subject to variable interest rates as of June 30, 2023[136]. - The Company purchased approximately 0.5 million common shares at a weighted-average market purchase price of approximately $14.34 per share for an aggregate purchase price of approximately $6.8 million during the six months ended June 30, 2023[125]. Challenges and Future Outlook - The Company anticipates future revenue growth will likely be at a lower rate due to favorable comparisons from the first half of 2022 impacted by the Omicron variant[85]. - The Company continues to face challenges in staffing and inflationary pressures affecting operational costs, which may impact future profitability[86]. - Macroeconomic pressures, including inflation and interest rate increases, could impact the company's ability to raise capital[116]. - Future outlook includes continued expansion and potential acquisitions to strengthen market position and enhance revenue streams[108]. - The company is committed to innovation in hospitality, focusing on new product offerings and technology integration to improve guest experiences[108].