globeinvestor.com

Breaking News from The Globe and Mail

Friday, February 24, 2006

Toronto — Fairmont Hotels & Resorts Inc. reported a turnaround in the latest fourth quarter as its swung to a profit of $68.4-million (U.S.) from a year-ago loss of $4.4-million.

The Toronto-based hotelier, in the process of being bought for $3.8-billion (Canadian) by a Saudi prince and an American property magnate, said its profit amounted to 88 cents a diluted share compared to a loss of 6 cents a share for the same period in 2004.

Excluding the effect of hotels sold in 2004 and 2005, gains on asset sales, a tax recovery and other non-operating items, diluted earnings per share were 12 cents US, compared to a loss of 5 cents in the prior-year quarter, Fairmont said.

Revenues for the three months ended Dec. 31, 2005, were up 40.9 per cent to $232.4-million (U.S.) from a year-earlier $164.9-million.

Revenue per available room, or revpar, for the comparable Fairmont managed portfolio increased 11.8 per cent in the quarter.

“Our U.S. properties continue to benefit from the robust U.S. lodging fundamentals,” chief executive officer William Fatt said in a release.

“In the fourth quarter, our comparable U.S.-managed-and-owned portfolios experienced revpar growth of 15 per cent and 9.6 per cent respectively, primarily driven by strong occupancy gains across all markets.”

Revpar at the chain's Canadian hotels rose 6.7 per cent in the quarter. But once adjusted for the higher Canadian dollar, that growth rate was 2.6 per cent, the company said.

Fairmont, which originated in the historic Canadian Pacific Railway luxury hotel chain and counts the Chateau Laurier, Royal York and Banff Springs among its properties, announced in January its board is supporting an offer of $3.3-billion in cash from Kingdom Hotels International and Colony Capital.

Including assumed debt, the deal is valued at $3.9-billion.

Fairmont shareholders are expected to vote on the deal at an April meeting.

For the full year, Fairmont made a profit of $167.5-million, or $2.16 per share diluted, on revenues of $670.2-million. In 2004, it earned $155.8-million, or $1.92 per share, on revenues of $654.1 million.

Kingdom Hotels is owned by Saudi Prince Alwaleed bin Talal bin Abdulaziz Alsaud, a global investor listed by Forbes magazine as the world's fifth-richest person with a net worth of $23.7-billion. He also owns 23 per cent of Toronto-based Four Seasons Hotels Inc..

Colony Capital is a Los Angeles private equity firm run by Tom Barrack, recently described by Fortune magazine as the world's best real estate investor.

Fairmont shares lost 19 cents Friday to close at $50.76 on the Toronto Stock Exchange.

© The Globe and Mail