InnVest Real Estate Investment Trust (TSX:INN.UN) cited a huge income tax recovery as the hotel operator swung to a big net profit in the final three months of the year.
The Mississauga, Ont.,-based concern said Friday that its net and comprehensive income in the quarter was $147.5 million or $1.22 per diluted unit, compared with a net loss of $4.3 million or 4.6 cents per diluted unit a year earlier.
InnVest says the profit included an income tax recovery of $165.4 million.
It says the recovery follows proposed amendments to federal law that clarify the tests used to qualify InnVest as a REIT for Canadian income tax purposes and for the valuation and measurement of its different categories of assets and revenues.
However, it said “there can be no assurances that InnVest will continue to qualify as a REIT for Canadian income tax purposes for subsequent taxation years.”
InnVest says its Ontario portfolio benefited from recent renovations and strength in the Greater Toronto Area. The REIT says this offset shortfalls in Ottawa and the Atlantic markets.
Revenue for the three months ended Dec. 31 was $151.7 million, including $147.7 million from hotel properties, $3.2 million from its franchise business and $848,000 from other properties. That was up slightly from overall revenues of $150.4 million in the same 2011 period.
For the full year, InnVest reported a net and comprehensive loss of $102.3 million or $1.09 per diluted unit on $625.2 million of revenue, compared with a profit of $44.5 million or 48 cents per unit on revenue of $617.1 million.
InnVest owns a portfolio of 135 hotels across Canada with about 18,000 guest rooms operated under internationally recognized brands. It also has a 50 per cent interest in franchising company Choice Hotels Canada Inc.
Its Ottawa portfolio includes The National Hotel and Suites, the Comfort Inn Ottawa East, the Comfort Inn Kanata, the Holiday Inn Ottawa Kanata, Les Suites Hotel, the Quality Hotel Ottawa and the Travelodge Ottawa East.
-With reports by OBJ staff