Skyline Investments Inc · TASE:SKLN
Skyline Investments — Q2 2023 Earnings Presentation
32 slides from Skyline Investments's earnings presentation, Aug 22, 2023
Slide 1: Corporate Presentation
Corporate June 30, 2023 Presentation
Slide 2: Cautionary Statement
Cautionary Statement General This presentation has been prepared by Skyline Investments Inc. (the "Company“ or “Skyline”) as a general presentation about the Company. This presentation is not intended to replace the need to review the formal reports published by the Company to the public on the Tel-
Slide 3: Skyline's Vision & Mission
Skyline’s Vision & Mission We’re creating one of North America’s leading hospitality real estate investment companies, with a focus on value-add income producing select-service hotels mainly in suburbs of major metropolitan areas. Skyline seeks to create shareholder value and deliver superior risk a
Slide 4: Select Service Hotels
Select Service Hotels ▪ Select service is a segment of the hotel industry that focuses on mid-market business travelers during the week and family travel on the weekend, providing stable and predictable cash flow ▪ Select service hotels are typically smaller properties that are located in suburban m
Slide 5: Corporate Profile
Corporate Profile 17 Income Producing Assets 2,856 Guestrooms $607m/$295m Total Assets/Equity 49% Equity to Total Assets Ratio Baa1.il Bond Rating
Slide 6: Select Senior Management
Select Senior Management Blake Lyon, Robert Waxman, Neha Kapelus, CPA, CA CPA, CA CPA, CA, CBV CEO CFO* VP, Finance Blake Lyon has extensive Robert Waxman has over 20 years of Neha Kapelus has over 15 years experience in hotel and resort experience in accounting, finance, of diverse experience leadi
Slide 7: Current Ownership Structure
Current Ownership Structure 52.75% Alex Shnaider 1.54% 18.82% Public Blake Lyon 1.2% 25.69% ILDC 7
Slide 8: Business Strategy
Business Strategy Skyline’s Strategy Acquisition Targets ▪ Focusing on operating its "select-service" hotels in the U.S. and improving its financial and operating results from these properties; Focus on the US and Canada ▪ Examine and consider certain opportunities and the possibility of selling cer
Slide 9: Portfolio Map and Acquisition Focus
Portfolio Map and Acquisition Focus Canada TORONTO DEERFIELD ITHACA ARLINGTON HEIGHTS ROCKFORD TOLEDO CLEVELAND DAYTON MANASSAS LEXINGTON Main Areas of New Acquisitions LITTLE ROCK HUNTSVILLE OKLAHOMA CITY BIRMINGHAM Mexico Fort Myers 17 INCOME PRODUCING ASSETS | 2,856 HOTEL ROOMS | 16 CITIES IN THE
Slide 10: Main Operating Assets in the United States
Main Operating Assets in the United States The Hyatt Regency Arcade, Cleveland, OH
Slide 11: Courtyard by Marriott Hotels
14 Courtyard by Marriott Hotels Date of PROPERTIES Location Brand Management Service Level Acquisition OVERVIEW 10 States Courtyard by Aimbridge, Select Service Nov 14th, 2017/ (USD) Marriott Urgo July 11th, 2022 Number of Number of Acquisition Price Per Loan Balance Capital Credit Hotels Rooms Pric
Slide 12: Hyatt Regency Arcade
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Slide 13: Hyatt Regency Arcade
Hyatt Regency Arcade Improvements Overview ▪ Recently completed renovations of all rooms and meeting The historical Cleveland Arcade was built by John D. spaces. The renovation has improved the hotel’s Rockefeller in 1890 competitive advantage. The hotel is an attractive event destination and hosts
Slide 14: Renaissance Cleveland Hotel
Renaissance Cleveland Hotel
Slide 15: Renaissance Cleveland Hotel
Renaissance Cleveland Hotel Overview Improvements Historical Heritage asset established in 1918 as The Cleveland Hotel ▪ Skyline completed the full HVAC replacement. This was Notable visitors in the hotel’s history: Dwight D. Eisenhower, Gerald the top complaint from hotel guests and is also Ford, M
Slide 16: Transformational Transaction – Sale of Canadian Resorts
Transformational Transaction – Sale of Canadian Resorts • Skyline completed the majority sale of its Canadian resorts for an aggregate purchase price of CAD $210M in December 2021 • Freed Corp, through a newly formed subsidiary, Resort Communities LP ("Resort LP") then combined these assets with Mus
Slide 17: Other Legacy Assets Totaling CAD $165M
Other Legacy Assets Totaling CAD $165M Bear Valley Resort, California – CAD $25M gross book value ▪ 3 hours from San Francisco; 1,700 acres, 52 room hotel, expansion options Short-term equity and 29% interest in Resorts Residual interest in Deerhurst, Horseshoe, Communities LP – CAD $42M book value
Slide 18: Second Quarter 2023 Operating Results
Second Quarter 2023 Operating Results ▪ Q2 2023 same asset revenue1 is relatively the same with a slight increase by 0.02% to CAD $30.8M compared to CAD $30.79M in Q2 2022, due to higher RevPAR driven by an increase in ADR, and partially offset by a decrease in occupancy rate, and the impact of a su
Slide 19: Recent Non-Operating Events
Recent Non-Operating Events ▪ On April 20, 2023, a subsidiary of the Company entered into a new loan agreement with a banking corporation in connection with the financing and renovation of the Hyatt Regency Arcade Hotel in Cleveland. The new loan is a CMBS (commercial mortgage-backed security) loan
Slide 20: Recent Non-Operating Events
Recent Non-Operating Events ▪ On July 25, 2023, a subsidiary of the Company received a $3 million line of credit from a banking corporation against the lien of Courtyard Deerfield Hotel, intended for general working capital purposes. Loans made available pursuant to the credit line will be for a per
Slide 21: Summary of Periodic Results
Summary of Periodic Results CAD ‘000 H1 2023 H1 2022 YE 2022 Revenue from Hotels and Resorts 66,847 62,849 132,130 Sale of Residential Real Estate 4 1,321 1,570 Total Revenue 68,851 64,170 133,700 NOI from Hotels and Resorts 10,369 13,496 27,535 Total Adjusted EBITDA 5,935 9,593 19,727 FFO 616 5,137
Slide 22: Balance Sheet Highlights
Balance Sheet Highlights CAD ‘000, except where December 31, June 30, 2023 June 30, 2022 noted 2022 Total Assets 606,759 581,556 609,347 1 Gross Debt 246,190 221,680 240,490 Cash and Equivalents 13,692 40,607 19,503 Net Debt 232,498 181,073 220,987 Shareholders’ Equity 258,601 278,933 280,458 Non-Co
Slide 23: Skyline Going Forward
Skyline Going Forward New capital focus in 2023 and thereafter: ▪ Examine and consider certain opportunities and the possibility of selling certain assets, among others: a) selling of seasonal resorts and resort land development, thereby reducing its exposure in volatile and seasonal assets; b) redu
Slide 24: Share Price Discount to NAV
Share Price Discount to NAV NAV was 43.20 NIS per share1 compared to the share price on June 30, 2023 of 17.18 NIS, a discount of 60% Share price discount to NAV 45.22 44.18 43.61 44 43.2 39.52 38.83 40.18 35.51 36.24 34.20 34.04 34.04 60% 26.34 27.5 24.58 21.34 22.41 20.1 17.18 17.18 14.49 15.34 12
Slide 25: Financial Strength and Opportunities
Financial Strength and Opportunities ▪ Total equity to total assets ratio of 49% ▪ Low LTV (47% for total real estate) ▪ Cash balance of CAD $13.7M ▪ Additional net cash flow of CAD $96.30M during the next 4 years from VTBs ▪ In December 2021, Skyline completed the largest corporate transaction in i
Slide 26: Skyline's Value Proposition
Skyline’s Value Proposition ▪ Select-service focus on properties in both Canada and US ▪ Proven and experienced internal management team ▪ Strong relationship with Marriott ▪ Strategic partnerships providing ability to renovate assets in any state or province ▪ Diversified third-party hotel manageme
Slide 27: Thank You!
Thank You! Questions? Please contact Neha Kapelus| VP Finance 647-354-5159 | nehak@skylineinvestments.com WWW.SKYLINEINVESTMENTS.COM
Slide 28: Appendix
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Slide 29: Net Asset Value (in 000's CAD)
Net Asset Value (in 000’s CAD) Loan Balance Ownership BV TTM NOI NOI/BV LTV Equity June 30, 2023 Hotels and Resorts Hyatt Regency Arcade 100% 71,715 5,287 7.4% 31,348 44% 40,367 Renaissance Hotel 50% 99,697 (354) (0.4%) 24,614 25% 75,083 Courtyard Hotels 100% 222,340 17,439 7.8% 137,339 62% 85,001 B
Slide 30: Debt Composition and Maturities
Debt Composition and Maturities ▪ Bond B – Payments are current As of June 30, 2023 (CAD’000) ▪ Renaissance Loan – On October 07, 2022, the Company negotiated an extension with its current Weighted Average Term Maturity – 3.92 years lender to June 2029, at an interest rate of SOFR +2.75%. The Compan
Slide 31: Asset Ownership Breakdown
Asset Ownership Breakdown Property Property Owner Manager Brand/Franchise Leased Bear Valley Skyline Skyline Independent None Hyatt Regency Skyline Hyatt Hyatt Regency None Cleveland Marriott Renaissance Skyline Aimbridge Marriott Renaissance None Cleveland Marriott Courtyard Skyline Aimbridge, Urgo
Slide 32: Expected Net Cash Flow from Vendor Take-Back Loans (VTB)
Expected Net Cash Flow from Vendor Take-Back Loans (VTB) VTB Loans (CAD’000) 2023 2024 2025 and thereafter Total Port McNicoll 1,400 2,400 23,305 27,105 Vetta Spa 20 34 773 826 Total - Development 1,420 2,434 24,078 27,931 Freed Transaction VTB 1,042 15,685 51,642 68,370 Total VTB Inflows 2,462 18,1