Ashford Hospitality Trust, Inc. (NYSE: AHT) today reported financial results and performance measures for the second quarter ended June 30, 2023. The comparable performance measurements for Occupancy, Average Daily Rate (ADR), Revenue Per Available Room (RevPAR), and Hotel EBITDA assume each of the hotel properties in the Company's hotel portfolio as of June 30, 2023 was owned as of the beginning of each of the periods presented. Unless otherwise stated, all reported results compare the second quarter ended June 30, 2023 with the second quarter ended June 30, 2022.

SECOND QUARTER 2023 FINANCIAL HIGHLIGHTS

  • Comparable RevPAR for all hotels increased 6.7% to $144.25 during the quarter on a 3.8% increase in Comparable ADR and a 2.8% increase in Comparable Occupancy.
  • Net loss attributable to common stockholders was $(30.3) million or $(0.88) per diluted share for the quarter.  
  • Adjusted EBITDAre was $104.0 million for the quarter, reflecting a growth rate of 8% over the prior year quarter.
  • Adjusted funds from operations (AFFO) was $0.78 per diluted share for the quarter.
  • Comparable Hotel EBITDA was $117.5 million for the quarter, reflecting a growth rate of 5% over the prior year quarter.
  • The Company ended the quarter with cash and cash equivalents of $254.1 million and restricted cash of $150.5 million. The vast majority of the restricted cash is comprised of lender and manager held reserves.  At the end of the quarter, there was also $19.0 million in due from third-party hotel managers, which is primarily the Company's cash held by one of its property managers and is also available to fund hotel operating costs.
  • Net working capital at the end of the quarter was $344.0 million.
  • Capex invested during the quarter was $34.0 million.

RECENT OPERATING HIGHLIGHTS

  • During the quarter, the Company extended its BAML Highland Pool Loan until April 2024. As part of this extension, the Company paid down the existing loan balance by $45 million.
  • During the quarter, the Company refinanced its mortgage loans for the 157-room La Posada de Santa Fe in Santa Fe, New Mexico, which had a final maturity date in November 2023, and the 252-room Hilton Alexandria in Alexandria, Virginia, which had a final maturity date in June 2023.  These two loans were the Company's only final debt maturities in 2023.
  • To date, the Company has issued approximately $51 million of its non-traded preferred stock.
  • During the quarter, the Company extended its KEYS Pool C loan. Subsequent to quarter end, the Company extended its KEYS Pool D loan and its KEYS Pool E loan. In the interest of protecting stockholder value and liquidity, the Company elected not to make the required paydowns to extend its KEYS Pool A loan, its KEYS Pool B loan and its KEYS Pool F loan.

CAPITAL STRUCTURE
As of June 30, 2023, the Company had total loans of $3.7 billion with a blended average interest rate of 7.8%, taking into account in-the-money interest rate caps. Excluding the non-extended KEYS loans, based on the current level of LIBOR and SOFR and the corresponding interest rate caps, approximately 95% of the Company's debt is effectively fixed and approximately 5% is effectively floating.  Excluding the non-extended KEYS loans, currently twelve of the Company's hotels are in cash traps. 

During the quarter, the Company extended its BAML Highland Pool Loan until April 2024. As part of this extension, the Company paid down the existing loan balance by $45 million.

Also, during the quarter, the Company successfully refinanced its mortgage loans for the 157-room La Posada de Santa Fe in Santa Fe, New Mexico, which had a final maturity date in November 2023, and the 252-room Hilton Alexandria in Alexandria, Virginia, which had a final maturity date in June 2023. These two loans were the Company's only final debt maturities in 2023. The new, non-recourse loan totals $98.5 million and has a three-year initial term with two one-year extension options, subject to the satisfaction of certain conditions. The loan is interest only and provides for a floating interest rate of SOFR + 4.00%.

During the quarter, the Company extended its KEYS Pool C loan – secured by five hotels with a paydown of approximately $62 million. Subsequent to quarter end, the Company extended its KEYS Pool D loan – secured by five hotels with a paydown of approximately $26 million, and its KEYS Pool E loan – secured by five hotels with a paydown of approximately $41 million.  In the interest of protecting stockholder value and liquidity, the Company elected not to make the required paydowns to extend its KEYS Pool A loan – secured by seven hotels, its KEYS Pool B loan – secured by seven hotels, and its KEYS Pool F loan – secured by five hotels. The Company noted that proactively choosing not to extend three of these loan pools improves its balance sheet by lowering leverage and materially improves future cash flows. The combination of the paydowns and the removal of the debt associated with the pools the Company did not extend will lower the Company's debt by approximately $700 million. 

The Company did not pay a dividend on its common stock and common units for the second quarter ended June 30, 2023. The Board of Directors will continue to monitor the situation and assess future quarterly common dividend declarations. The Company is current on the dividends on its outstanding preferred stock and plans to pay dividends on its outstanding preferred stock on a current basis going forward.

The Company commenced the offering of its Non-Traded Preferred Equity during the third quarter of 2022. To date, the Company has issued 1,935,377 shares of its Series J and 90,323 shares of its Series K non-traded preferred stock raising approximately $50.6 million of gross proceeds. The expected use of proceeds for the Non-Traded Preferred Equity is acquisitions, paying down debt, and other general corporate purposes.

"During the second quarter, our portfolio delivered strong operating results," commented Rob Hays, Ashford Trust's President and Chief Executive Officer. "We've been extremely encouraged with the growth in both occupancy and ADR that we've been able to achieve and believe that strong performance reflects our high-quality, geographically diverse portfolio. Further, we're encouraged that the vast majority of our hotels are now out of their cash traps." Mr. Hays added, "On the capital management front, proactively choosing not to extend three of the KEYS loan pools improves our balance sheet by lowering leverage and materially improves our future cash flows. Looking ahead, our portfolio remains well positioned to outperform and, from a capital structure and balance sheet perspective, we will continue to focus on paying off our corporate financing and raising capital through our non-traded preferred stock."