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Sep 30, 2020
Service Properties Trust Q3 2020 Earnings Report
Announced third quarter 2020 results, reflecting the impact of the COVID-19 pandemic and strategic portfolio adjustments.
Key Takeaways
Service Properties Trust reported a net loss of $102.6 million for the third quarter of 2020, with Normalized FFO at $0.14 per share and Adjusted EBITDAre at $103.6 million, influenced by the COVID-19 pandemic and the termination of hotel management agreements with IHG and Marriott.
Net loss for the quarter was $102.6 million, or $0.62 per common share.
Normalized FFO was $23.2 million, or $0.14 per common share.
Adjusted EBITDAre decreased 50.6% year over year to $103.6 million.
Terminated hotel management agreements with IHG and Marriott due to non-payment of minimum returns.
Forward Guidance
SVC anticipates completing $218.0 million in hotel sales and $0.8 million in net lease property sales by the end of the year, aiming to enhance financial flexibility, though these sales are subject to contingencies.
Positive Outlook
- Rebranding hotels to Sonesta may offer benefits.
- Proactive steps taken to maintain liquidity and preserve capital.
- Hotel portfolio showing gradual performance improvement.
- Occupancy rates at hotel portfolio steadily increasing.
- Rent collections from retail net lease tenants trending upward.
Challenges Ahead
- COVID-19 pandemic and economic conditions may persist or worsen.
- Actions taken may not ensure sufficient liquidity and capital preservation.
- Capital spending deferred may become necessary sooner than expected.
- Sonesta is a smaller company compared to Wyndham, IHG, and Marriott.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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