October 2015 Revenue
Report
PANAMA, REPUBLIC OF PANAMA--(Marketwired - Nov 17,
2015) - Thunderbird Resorts Inc.
("Thunderbird" or "Group") (EURONEXT:TBIRD)(FRANKFURT:4TR)
announces its interim results for the first quarter and three
months ended September 30, 2015.
Group Overview for Third Quarter 2015
Performance Under our Stated
Goals1
In the Group's Half-year Report 2015, our CEO
stated certain goals to achieving profitability and building a
healthy, growing company. Here is a snapshot of our performance
under these stated goals in Q3 2015:
Stated Goal |
|
Progress |
Development |
|
On February 25, 2015, the Group sold its economic interest
and management rights in its seven casinos in Costa Rica as a
strategic decision to exit a mature operation in which we only
owned an approximate 50% stake. The net cash received for the
Group's approximate 50% share was approximately $8.1 million. We
continue to own real estate in Costa Rica with an appraised value
to our 50% of approximately $14.9 million, which real estate is
free and clear of debt and is being held for sale. On April 22,
2015, the Group opened a 1,200 square meters entertainment venue in
Managua, Nicaragua with 111 slot machines, 21 gaming table
positions and 110 F&B positions. Based on five full months of
operation, this property is generating $226 thousand in property
EBITDA on an annualized basis as compared to -$23 thousand of
property EBITDA for the full year 2014 for the Pharaoh's Holiday
Inn that it replaced. |
Grow EBITDA2 in Continuing
Operations |
|
Property EBITDA increased by 11.2% and adjusted EBITDA
increased by 35.8% through Q3 2015 as compared to the same period
in 2014. |
Reduce Debt and / or Refinance Remaining Debt |
|
Gross debt has been reduced to $35.8 million as of September
30, 2015, as compared to $46.2 million on December 31, 2014. Net
debt (gross debt less cash and cash equivalents) has been reduced
to $31.1 million on September 30, 2015, as compared to $41.3
million on December 31, 2014. As of this date, we continue to seek
refinancing of our secured Peru-related debt. |
Increase Shareholder Value |
|
From January to October 2015, the Company has purchased
660,000 shares while directors/officers have purchased 850,000
shares. We continue to believe that our share price does not
reflect the intrinsic value of the company. We continue to evaluate
our capital structure, the sale of part or all of our approximately
$76 million in real estate (based on appraised values) and other
strategic alternatives to optimize value for shareholders. The goal
of any material transaction would be to "right size" cash flow and
to build shareholder value by investing in growth. |
(1)
Unless otherwise stated, all figures reported
herein are in USD and report the results of those businesses that
were continuing as of September 30, 2015, as compared to those same
businesses through the nine months ended September 30, 2014, or
through year-end 2014. Our stated goals have evolved over the last
year, but are materially the same as set forth in previous
reports.
(2)
"EBITDA" is not an accounting term under IFRS, and
refers to earnings before net interest expense, income taxes,
depreciation and amortization, equity in earnings of affiliates,
minority interests, development costs, other gains and losses, and
discontinued operations. "Property EBITDA" is equal to EBITDA at
the country level(s). "Adjusted EBITDA" is equal to property EBITDA
less "Corporate expenses," which are the expenses of operating the
parent company and its non-operating subsidiaries and
affiliates.
Summary Third Quarter 2015
Consolidated P&L:
Below is our consolidated profit / (loss) summary
for the nine months ended September 30, 2015, as compared with the
same period of 2014. In summary, Group revenue decreased by $1.4
million or 4.3% on a USD basis (see "Forex" note below below where
it shows revenue on a currency neutral basis has grown), while
adjusted EBITDA increased by $696 thousand or 35.8% because of
aggressive efficiency.
(In thousands) |
|
|
|
|
|
|
|
|
|
|
Nine months
ended |
|
|
|
|
|
|
September
30 |
|
|
|
% |
|
|
2015 |
|
2014 |
|
Variance |
|
change |
Net
gaming wins |
|
$ |
25,716 |
|
|
$ |
25,937 |
|
|
$ |
(221 |
) |
|
-0.9 |
% |
Food and
beverage sales |
|
|
2,304 |
|
|
|
2,518 |
|
|
|
(214 |
) |
|
-8.5 |
% |
Hospitality and other sales |
|
|
3,455 |
|
|
|
4,421 |
|
|
|
(966 |
) |
|
-21.9 |
% |
Total revenues |
|
|
31,475 |
|
|
|
32,876 |
|
|
|
(1,401 |
) |
|
-4.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Promotional allowances |
|
|
3,539 |
|
|
|
3,441 |
|
|
|
98 |
|
|
2.8 |
% |
Property,
marketing and administration |
|
|
22,109 |
|
|
|
24,197 |
|
|
|
(2,088 |
) |
|
-8.6 |
% |
Property EBITDA |
|
|
5,827 |
|
|
|
5,238 |
|
|
|
589 |
|
|
11.2 |
% |
Corporate
Expenses |
|
|
3,188 |
|
|
|
3,295 |
|
|
|
(107 |
) |
|
-3.2 |
% |
Adjusted EBITDA |
|
|
2,639 |
|
|
|
1,943 |
|
|
|
696 |
|
|
35.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
EBITDA as a percentage of revenues |
|
|
8.4 |
% |
|
|
5.9 |
% |
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
2,836 |
|
|
|
2,903 |
|
|
|
(67 |
) |
|
-2.3 |
% |
Interest
and financing costs, net |
|
|
3,175 |
|
|
|
2,807 |
|
|
|
368 |
|
|
13.1 |
% |
Management fee attributable to non-controlling interest |
|
|
- |
|
|
|
(347 |
) |
|
|
347 |
|
|
-100.0 |
% |
Project
development |
|
|
91 |
|
|
|
- |
|
|
|
91 |
|
|
0.0 |
% |
Foreign
exchange (gain) / loss |
|
|
406 |
|
|
|
125 |
|
|
|
281 |
|
|
224.8 |
% |
Other
(gains) / losses |
|
|
1,488 |
|
|
|
1,280 |
|
|
|
208 |
|
|
16.3 |
% |
Income
taxes |
|
|
248 |
|
|
|
246 |
|
|
|
2 |
|
|
0.8 |
% |
Loss for the period from continuing operations |
|
$ |
(5,605 |
) |
|
$ |
(5,071 |
) |
|
$ |
(534 |
) |
|
10.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forex: The strengthening of
the US dollar versus our operating currencies continues to have a
material impact on our as reported profit / (loss) as compared to
the same period in 2014. Under a currency neutral analysis (in
which the same exchange rate would be applied to both periods as to
remove Forex swings from the analysis), Group revenue would have
grown by $1.5 million or 4.9% and adjusted EBITDA would have
increased by $1.1 million or 77.0%.
Interest and Financing costs,
net: The increase in financing costs, net was due to the fact
that in 2014 the Group benefitted from material interest income
from the financed portion of its sale of Philippines assets, which
loan has since been repaid by the purchaser. Our average weighted
borrowing cost as of September 30, 2015, was just 8.60% as we have
continued to pay down our highest interest debt.
Below is the Group's Gross debt and Net Debt on
September 30, 2015.
(In thousands; proportional
consolidation) |
|
|
|
|
|
|
|
|
Sep-15 |
|
Jun-15 |
|
Mar-14 |
Borrowings |
|
$ |
34,187 |
|
$ |
34,947 |
|
$ |
37,088 |
Obligations under leases and hire purchase contracts |
|
|
1,673 |
|
|
564 |
|
|
684 |
Gross Debt |
|
$ |
35,860 |
|
$ |
35,511 |
|
$ |
37,773 |
Less:
cash and cash equivalents (excludes restricted cash) |
|
|
4,668 |
|
|
7,755 |
|
|
10,525 |
Net Debt |
|
$ |
31,192 |
|
$ |
27,756 |
|
$ |
27,248 |
|
|
|
|
|
|
|
|
|
|
Note: Gross debt above is presented net of debt
issuance costs (costs of debt at time of issuance, which are
currently non-cash and amortize over time) which is why there is an
approximate $0.3 million variance with the total Principal balance
below.
The increase in Obligations under leases as of
September 2015 was due to the addition of $1.9 million of gaming
machines debt in Peru as detail below:
|
|
|
|
Balance |
|
|
|
Interest |
|
Maturity |
|
|
Additions |
|
Sep 30, 2015 |
|
Collateral |
|
rate |
|
date |
Peru |
|
|
|
|
|
|
|
|
|
|
Obligations under leases |
|
1,909 |
|
1,232 |
|
Gaming machines |
|
8.0% |
|
Jul, Aug and Sep 2017 |
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ 1,909 |
|
$ 1,232 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group estimates its debt schedule as follows
starting in October 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Payment |
|
|
2015 |
|
2016 |
|
2017 |
|
2018 |
|
2019 |
|
Thereafter |
|
Total |
Corporate |
|
|
$ |
3,660,952 |
|
$ |
5,963,599 |
|
$ |
4,909,213 |
|
$ |
2,513,506 |
|
$ |
1,375,026 |
|
$ |
3,397,095 |
|
$ |
21,819,391 |
Peru |
|
|
|
511,195 |
|
|
2,167,105 |
|
|
1,726,695 |
|
|
1,395,824 |
|
|
6,613,313 |
|
|
- |
|
|
12,414,132 |
Nicaragua |
|
|
|
58,336 |
|
|
265,953 |
|
|
269,563 |
|
|
294,887 |
|
|
735,749 |
|
|
322,190 |
|
|
1,946,698 |
Total |
|
|
$ |
4,230,503 |
|
$ |
8,396,657 |
|
$ |
6,905,471 |
|
$ |
4,204,217 |
|
$ |
8,724,088 |
|
$ |
3,719.285 |
|
$ |
36,180,221 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Payment |
|
|
|
2015 |
|
|
2016 |
|
|
2017 |
|
|
2018 |
|
|
2019 |
|
|
Thereafter |
|
|
Total |
Corporate |
|
|
$ |
666,514 |
|
$ |
1,686,670 |
|
$ |
908,049 |
|
$ |
619,272 |
|
$ |
456,979 |
|
$ |
419,584 |
|
$ |
4,757,068 |
Peru |
|
|
|
283,035 |
|
|
1,036,716 |
|
|
815,066 |
|
|
620,176 |
|
|
223,950 |
|
|
- |
|
|
2,978,943 |
Nicaragua |
|
|
|
58,480 |
|
|
172,373 |
|
|
145,763 |
|
|
120,439 |
|
|
92,985 |
|
|
30,880 |
|
|
620,920 |
Total |
|
|
$ |
1,008,029 |
|
$ |
2,895,759 |
|
$ |
1,868,878 |
|
$ |
1,359,887 |
|
$ |
773,914 |
|
$ |
450,464 |
|
$ |
8,356,931 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peru Update
Summary Peru Third Quarter 2015
Consolidated P&L:
Our Peru profit / (loss) summary for the nine
months ended September 30, 2015, as compared with the same period
of 2014 is set out below. In summary, Peru revenue has reduced by
$1.9 million or 8.4% on a USD basis (see "Forex" note below for
information on currency neutral revenue), while property EBITDA has
increased by $840 thousand or 23.9% due to aggressive efficiency
programs.
(In thousands) |
|
|
|
|
|
|
|
|
|
|
Nine months
ended |
|
|
|
|
|
|
September
30 |
|
|
|
% |
|
|
2015 |
|
2014 |
|
Variance |
|
change |
Net
gaming wins |
|
$ |
16,648 |
|
|
$ |
16,984 |
|
|
$ |
(336 |
) |
|
-2.0 |
% |
Food and
beverage sales |
|
|
815 |
|
|
|
1,335 |
|
|
|
(520 |
) |
|
-39.0 |
% |
Hospitality and other sales |
|
|
3,294 |
|
|
|
4,336 |
|
|
|
(1,042 |
) |
|
-24.0 |
% |
Total revenues |
|
|
20,757 |
|
|
|
22,655 |
|
|
|
(1,898 |
) |
|
-8.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Promotional allowances |
|
|
2,231 |
|
|
|
2,191 |
|
|
|
40 |
|
|
1.8 |
% |
Property,
marketing and administration |
|
|
14,178 |
|
|
|
16,956 |
|
|
|
(2,778 |
) |
|
-16.4 |
% |
Property EBITDA |
|
|
4,348 |
|
|
|
3,508 |
|
|
|
840 |
|
|
23.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
EBITDA as a percentage of revenues |
|
|
20.9 |
% |
|
|
15.5 |
% |
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
2,310 |
|
|
|
2,443 |
|
|
|
(133 |
) |
|
-5.4 |
% |
Interest
and financing costs, net |
|
|
991 |
|
|
|
983 |
|
|
|
8 |
|
|
0.8 |
% |
Management fee attributable to non-controlling interest |
|
|
7 |
|
|
|
(64 |
) |
|
|
71 |
|
|
-110.9 |
% |
Foreign
exchange (gain) / loss |
|
|
766 |
|
|
|
368 |
|
|
|
398 |
|
|
108.2 |
% |
Other
(gains) / losses |
|
|
(97 |
) |
|
|
(3 |
) |
|
|
(94 |
) |
|
3133.3 |
% |
Loss for the period from continuing operations |
|
$ |
371 |
|
|
$ |
(219 |
) |
|
$ |
590 |
|
|
-269.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forex: Under a currency
neutral basis (in which the same exchange rate would be applied to
both periods), Peru revenue would have grown by $491 thousand or
2.4% and property EBITDA would have increased by $1.2 million or
38.6%.
Profit for the period in Peru
is $371 thousand (an improvement of $590 thousand as compared to
2014), which primarily is the result of efficiency programs the
Group has implemented that have led to the reduction of $2.8
million in property, marketing and administration expense.
Key business drivers: a)
During Q3 and Q4 2014, the Group opened 24 electronic roulette and
56 new table positions, and 2015 is the first full year of
operation of these positions; b) The consolidation of our Peru
administrative offices to free up space and increase space for
third party rentals is expected to have an impact in Q1 2016; c)
Effective April 30, 2015, the Group's contract to manage the El
Pueblo Resort expired, thus reducing revenue on an annualized basis
by approximately $730 thousand; and d) The Group announced in its
2014 Annual Report that it has reduced payroll by approximately
$1.5 million (annualized) between September 2014 and approximately
April 2015. The year-to-date impact of these reductions as of
September 30, 2015 has been $1.6 million, which is materially
higher than forecasted.
Nicaragua Update
Summary Nicaragua First Quarter
2015 Consolidated P&L:
Below is our Nicaragua profit / (loss) summary for
the nine months ended September 30, 2015, as compared with the same
period of 2014. In summary, Nicaragua revenue has increased by $567
thousand or 5.6% on a USD basis (see "Forex" note below) and
property EBITDA has decreased by $251 thousand or 14.5% partially
due to: a) The growth of lower margin food and beverage revenue;
and b) A one-time increase in marketing expense related to the
opening of our new casino property (described below).
(In thousands) |
|
|
|
|
|
|
|
|
|
|
Nine months
ended |
|
|
|
|
|
|
September
30 |
|
|
|
% |
|
|
2015 |
|
2014 |
|
Variance |
|
change |
Net
gaming wins |
|
$ |
9,068 |
|
|
$ |
8,953 |
|
|
$ |
115 |
|
|
1.3 |
% |
Food and
beverage sales |
|
|
1,489 |
|
|
|
1,183 |
|
|
|
306 |
|
|
25.9 |
% |
Hospitality and other sales |
|
|
161 |
|
|
|
15 |
|
|
|
146 |
|
|
973.3 |
% |
Total revenues |
|
|
10,718 |
|
|
|
10,151 |
|
|
|
567 |
|
|
5.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Promotional allowances |
|
|
1,308 |
|
|
|
1,250 |
|
|
|
58 |
|
|
4.6 |
% |
Property,
marketing and administration |
|
|
7,931 |
|
|
|
7,171 |
|
|
|
760 |
|
|
10.6 |
% |
Property EBITDA |
|
|
1,479 |
|
|
|
1,730 |
|
|
|
(251 |
) |
|
-14.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
EBITDA as a percentage of revenues |
|
|
13.8 |
% |
|
|
17.0 |
% |
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
501 |
|
|
|
413 |
|
|
|
88 |
|
|
21.3 |
% |
Interest
and financing costs, net |
|
|
118 |
|
|
|
103 |
|
|
|
15 |
|
|
14.6 |
% |
Management fee attributable to non-controlling interest |
|
|
34 |
|
|
|
18 |
|
|
|
16 |
|
|
88.9 |
% |
Project
development |
|
|
91 |
|
|
|
- |
|
|
|
91 |
|
|
0.0 |
% |
Foreign
exchange (gain) / loss |
|
|
140 |
|
|
|
131 |
|
|
|
9 |
|
|
6.9 |
% |
Other
(gains) / losses |
|
|
(6 |
) |
|
|
24 |
|
|
|
(30 |
) |
|
-125.0 |
% |
Income
taxes |
|
|
221 |
|
|
|
218 |
|
|
|
3 |
|
|
1.4 |
% |
Loss for the period from continuing operations |
|
$ |
380 |
|
|
$ |
823 |
|
|
$ |
(443 |
) |
|
-53.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forex: On a currency neutral
basis (in which the same exchange rate would be applied to both
periods), Nicaragua revenue would have grown by $1.0 million or
10.9% and property EBITDA would have decreased by $169 thousand or
10.3%.
Profit for the period in
Nicaragua is $380 thousand (a reduction of $443 thousand), which is
primarily the result of the increased property, marketing and
administration expense as described above. The profit for the
period was also impacted by higher depreciation (non-cash item) and
by project development costs of $91 thousand. Both items were
directly related to the opening of the new Pharaoh's Bolonia
casino.
Key business driver - new
Pharaoh's Bolonia Casino: On April 22, 2015, the Group opened a
1,200 square meters entertainment venue with 111 slot machines, 21
gaming table positions and 110 F&B positions. This property is
located in a premium area in the heart of Managua in which the
government is investing heavily to promote tourism. The Group has
moved its Pharaoh's Holiday Inn property to this new location which
is owned by the Company and which has far superior market
visibility, parking and space distribution for our business. The
facility also has 29 additional gaming positions as compared to the
old casino it replaced. Based on Q3 results (first full quarter of
operation), the annualized revenue and EBITDA of the Casino Bolivar
would be $2.3 million and $252 thousand, respectively.
Other Group Updates
Below are the material events in our business
since filing our 2015 Half-year Report on August 30, 2015.
Over the course of several weeks beginning
September 9, 2015, the Company announced that various directors and
officers purchased 846,184 of its issued and outstanding common
shares through the market as well as from a shareholder in a
private transaction. In addition, Thunderbird itself purchased
660,000 shares through the facilities of the Euronext Amsterdam in
accordance with the applicable rules of the exchange concerning
private transactions. The shares were purchased at an average share
price of $0.50 per share.
In September 2015, the Company announced the
reduction of debt balance owed to a single lender from
approximately $3.4 million to $600 thousand, for a gross debt
reduction of $2.8 million and one-time gain to the Group of $2.9
million. Gross debt balances forecast for the end of October 2015,
are preliminarily estimated at $33 million.
OCTOBER 2015 REVENUE
REPORT
Below is the Group's preliminary revenue report
for October 2015 as compared with October 2014:
Group-wide
sales by country - (unaudited, in
millions)(1) |
|
October
2015 |
|
October
2014 |
|
Year-over-year
increase/(decrease) |
Peru(2) |
|
$2.20 |
|
$2.57 |
|
-14.40% |
Nicaragua |
|
1.20 |
|
1.06 |
|
13.21% |
Total Consolidated Operating Revenues |
|
$3.40 |
|
$3.63 |
|
-6.34% |
1 Revenues
reported are based on monthly average exchange rates, are same
store and are in USD millions. |
|
2 Revenues are
generated primarily from gaming, and secondarily from our
fully-owned Fiesta Hotel and from 2 hotels under management. |
|
Forex: On a currency neutral
basis, our October 2015 revenues would have improved as
follows:
- Peru revenue for October 2015 as compared to
October 2014 would have decreased by approximately $100 thousand or
-4.35%.
- Nicaragua revenue for October 2015 as compared to
October 2014 would have increased by approximately $190 thousand or
18.81%.
- Total revenue for October 2015 as compared to
October 2014 would have increased by approximately $90 thousand or
2.72%.
For more detail on these developments, please
visit www.thunderbirdresorts.com to find our press releases dated
January to October 2015.
Capital Resources and Liquidity
The Group measures its liquidity needs by:
- Monitoring short-term obligations on a
country-by-country and global, consolidated basis, with short-term
inflows and outflows forecasted for the financial year, updated
weekly.
- Monitoring long-term, scheduled debt servicing
payments.
- Rolling forward 5-year cash flow models each
month based on the financial results year-to-date through the
previous month.
The Group has the capacity to manage liquidity
with different tools at its disposal, including:
- Raising of debt or equity capital at both the
operations and Group levels.
- Selling of non-strategic assets.
- Restructuring or deferral of unsecured
lenders.
- Restructuring of salaries of key personnel.
- Deferral or aging of accounts payables.
- Cost management programs at both the operations
and Group levels.
Based upon our current expectations for the third
quarter of 2015, we anticipate that our available cash balances,
our cash flow from operations and available borrowing capacity
under our existing credit arrangements will be sufficient to fund
our liquidity requirements for at least the next 18 months.
Document Availability: Copies
of the Third Quarter Interim Management Statement in the English
language will be available at no cost at the Group's website at
www.thunderbirdresorts.com. Copies in the English language are
available at no cost at the Group's operational office in Panama
and at the offices of our local paying agent ING Commercial
Banking, Paying Agency Services, Location Code TRC 01.013,
Foppingadreef 7, 1102 BD Amsterdam, the Netherlands (tel: +31 20
563 6619, fax: +31 20 563 6959, email: iss.pas@ing.nl). Copies are
also available on SEDAR at www.SEDAR.com.
ABOUT THE COMPANY
We are an international provider
of branded casino and hospitality services, focused on markets in
Latin America. Our mission is to "create extraordinary experiences
for our guests." Additional information about the Group is
available at www.thunderbirdresorts.com.
Cautionary Notice: This
release contains certain forward-looking statements within the
meaning of the securities laws and regulations of various
international, federal, and state jurisdictions. All statements,
other than statements of historical fact, included herein,
including without limitation, statements regarding potential
revenue and future plans and objectives of the Group are
forward-looking statements that involve risk and uncertainties.
There can be no assurances that such statements will prove to be
accurate and actual results could differ materially from those
anticipated in such statements. Important factors that could cause
actual results to differ materially from the Group's
forward-looking statements include competitive pressures,
unfavorable changes in regulatory structures, and general risks
associated with business, all of which are disclosed under the
heading "Risk Factors" and elsewhere in the Group's documents filed
from time-to-time with the AFM and other regulatory
authorities.
Thunderbird Resorts Inc.
Peter LeSar
Chief Financial Officer
Phone: (507) 223-1234
Email: plesar@thunderbirdresorts.com
www.thunderbirdresorts.com