Thunderbird Resorts 2022 Annual Report Filed

Thunderbird Resorts Inc. ("Thunderbird") (FSE: 4TR; and Euronext: TBIRD) is pleased to announce that its 2022 Annual Report and Audited Consolidated Financial Statements have been filed with the Euronext ("Euronext Amsterdam") and the Netherlands Authority for Financial Markets ("AFM"). As a Designated Foreign Issuer with respect to Canadian securities regulations, the Annual Report is intended to comply with the rules and regulations set forth by the AFM and the Euronext Amsterdam. Copies of the Annual Report 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: [email protected]). Copies are also available on SEDAR at www.SEDAR.com. Below are certain material excerpts from the full 2022 Annual Report the entirety of which can be found on our website at www.thunderbirdresorts.com.

LETTER FROM CEO

Dear Shareholders and Investors:

The below summarizes the Group's performance through December 31, 2022. 

   1. CHANGES IN PERFORMANCE IN 2022

In summary, Group revenue from continuing operations increased by $1.4 million or 10.5%, while adjusted EBITDA decreased by $172 thousand or -4.5%. Consolidated Profit for the period is $927 thousand, an improvement of $638 thousand or 220.8% as compared with 2021 results. 

  1. EBITDA1: Peru property EBITDA fell by $7 thousand and Nicaragua property EBITDA increased by $24 thousand, respectively, as compared to the same period in 2021. Corporate Expense was increased by $189 thousand in 2022 as compared to 2021. Adjusted EBITDA decreased by $172 thousand or -4.5% through December 31, 2022 as compared to through December 31, 2021. 
  2. Profit / (Loss): Our Profit improved by approximately $638 thousand for the period as compared to 2021. This improvement was the result of increased revenue and other gains of $1.4 million and $792 thousand, respectively, partially offset by increased expenses of approximately $1.6 million in 2022 as compared to 2021.
  3. Net Debt: Net debt as of December 31, 2022 decreased to $7.2 million as compared to $16.1 million as of December 31, 2021. Due to a change in accounting policy as required by IFRS 16, the Group is required to account for the net present value of real estate operating lease contracts as Obligations under leases and hire purchase contracts. Approximately $4.1 million of our net debt is comprised of Obligations under leases and hire purchase contracts.
  4. MANAGEMENT TO MITIGATE THE RISKS OF COVID-19: In terms of demand, the tail effects of Covid-19 still could be felt in local demand for offices due to remote work and in consumer and tourism spending in the hotel business in particular. Having said that, through 2022, Management not only continued to stabilize its office and gaming operations and cash management, but retooled its business away from hotels with the conversion of its last remaining hotel to apartments (see below). As a result, we feel reasonably confident that the Group is able to carry on with the shareholder mandate set forth in the September 21, 2016 Special Resolutions. See more about our progress below.

   2. MATERIAL PROGRESS TOWARD SHAREHOLDER MANDATE

The Group continues to pursue decisions that will support the best interest of shareholders according to the shareholder mandate set forth in the September 21, 2016 Special Resolutions the status of which is summarized below in relation to the Group's key remaining assets:

  1. Peru Hotel Real Estate Converted to Apartment Units: As of the date of publication of this 2022 Annual Report, the Group has converted its 66-suite hotel in Lima, Peru into a 66-unit condominium apartment complex. The Group has: i) Legally sub-divided the former hotel into 66 individually titled apartment units, procured all change of use and other regulatory approvals, and sold the majority of those units; and ii) Paid off over $4.5 million of senior debt in Lima, Peru. The projection is to generate in excess of $10 million from all unit sales, which will likely be completed during 2023.
  2. Peru Office Real Estate Performance Improving: The Group also has approximately 6,703 m2 of rentable-sellable office space, and 83 underground parking spaces. Office occupancies have stabilized over 2022, but at levels that are lower than those pre-covid. The Group is evaluating whether or not to convert offices to apartment units and to sell them individually as it has been executing successfully on for the hotel-to-apartment conversion.
  3. Nicaragua Gaming and Real Estate Assets: As of the publication date of this 2022 Annual Report, the Group continued to own a 56% interest in a Nicaraguan holding company that owns the following assets: i) Gaming: Three full casinos and three slot parlors with a combined approximately 630 gaming positions; and ii) Real Estate: Approximately 4,562 m2 of land divided among 5 parcels as more fully detailed on page 14.
  4. Costa Rica Real Estate Asset: As of the publication of this 2022 Annual Report, the Group continues to own a 50% interest in a Costa Rican entity that owns the 11.6-hectare real estate property known as "Tres Rios". Tres Rios, with its own, dedicated off ramp, is located close to the country's 2nd largest mall on the highway between the capital city of San Jose and the commuter city of Cartago.

The Group will continue to pursue decisions that will support the best interest of shareholders according to the shareholder mandate set forth in the September 21, 2016 Special Resolutions.

Salomon Guggenheim

Chief Executive Officer and President

April 30, 2023

1. "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.

GROUP OVERVIEW

The Group's consolidated profit / (loss) summary for the twelve months ended December 31, 2022, as compared with the same period of 2021 is contained in the Group's Annual Report for year ending December 31, 2022, located at www.thunderbirdresorts.com. In summary, Group revenue increased by $1.4 million or 10.5%, while adjusted EBITDA decreased by $172 thousand or -4.5%. Consolidated Profit for the period is $927 thousand, an improvement of $638 thousand or 220.8% as compared with 2021 results.

RISK MANAGEMENT

For more detail on Risk Factors, see Chapter 8 of the Annual Report.

MANAGEMENT STATEMENT ON "GOING CONCERN"

Management has reviewed their plan with the Directors and has collectively formed a judgment about the going concern of the Group. In arriving at this judgment, Management has prepared the cash flow projections of the Group. The Group has suffered recurring losses the past years. In response to the recurring losses of the previous years, Management has taken actions which will be described in the following paragraphs. 

Directors have reviewed this information provided by Management and have considered the information in relation to the financing uncertainties in the current economic climate, the Group's existing commitments and the financial resources available to the Group.  Specifically, Directors have considered: (i) there are probably no sources of new financing available to the Group; (ii) the Group has limited trading exposures to our local suppliers and retail customers; (iii) other risks to which the Group is exposed, the most significant of which is considered to be regulatory risk; (iv) sources of Group income, including management fees charged to and income distributed from its various operations; (v) cash generation and debt amortization levels; (vi) fundamental trends of the Group's businesses; (vii) ability to re-amortize and unsecured lenders; and (vii) level of interest of third parties in the acquisition of certain operating assets, and status of genuine progress and probability of closing within the Going Concern period. The Directors have also considered certain critical factors that might affect continuing operations, as follows: 

  • Special Resolution: On September 21, 2016, the Group's shareholders approved a special resolution that, among other items, authorized the Board of Directors of the Corporate to sell "any or all remaining assets of the Corporation in such amounts and at such times as determined by the Board of Directors." This resolution facilitates the sale of any one or any combination of assets required to support maintaining of a going concern by the Group.
  • Corporate Expense and Cash Flow: Corporate expense has decreased materially in recent years,  but still must accommodate for compliance as a public company.
  • Liquidity and Working Capital: As of the date of publication of this 2022 Annual Report, the Group forecasts to operate with higher levels of reserves and working capital than in recent years, but to create a healthy level of working capital reserves for periods beyond the Going Concern period may require the sale of additional assets.

In part, the Group believes that it is in a stronger position to sustain going concern as of the publication date of this 2022 Annual Report as compared to recent years during the covid crisis because of the following:

  • Peru Real Estate Sales: As of the date of publication of this 2022 Annual Report, the Group has converted it's 66-suite hotel in Lima, Peru into a 66-unit condominium apartment complex. The Group has: i) Legally sub-divided the former hotel in to 66 individually titled apartment units, procured all change of use and other regulatory approvals, and sold the majority of those units; and ii) Paid off over $4.5 million of senior debt in Lima, Peru. The projection is to generate in excess of $10 million from all unit sales, which will likely be completed during 2023.
  • Other liquidity events: The Group continues to work with unsecured lenders and, in some cases, to negotiate payment plans and balances that meet the Group's cash flow. If the Group is not able to create other liquidity events from its remaining Peru, Costa Rica and Nicaragua assets in 2023-2024, it is reasonable to expect that some unsecured lenders may pursue years of litigation at that time, though as to whether this would then have an impact on Going Concern is hard to assess.

Considering the above, Management and Directors are satisfied that the consolidated Group has adequate resources to mitigate the uncertainty and that the Group is able to continue as a going concern for at least the 12 months following the filing date of this report. For these reasons, Management and Directors have therefore prepared the consolidated financial statements on a going concern basis.

THUNDERBIRD RESORTS, INC. CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Expressed in thousands of United States dollars) For the year ended December 31, 2022 were approved by the Board of Directors on April 30, 2023 and are contained in the 2022 Annual Report posted at www.thunderbirdresorts.com. The consolidated financial statements and the accompanying notes are an integral part of these consolidated financial statements. 

ABOUT THE COMPANY

Thunderbird Resorts Inc. is an international provider of branded casino and hospitality services, focused on markets in Latin America. Its mission is to "create extraordinary experiences for our guests. "Additional information about the Group is available at www.thunderbirdresorts.com

Contact: Peter Lesar, Chief Financial Officer ∙ Phone: (507) 223-1234 ∙ Email: [email protected]

Cautionary Notice:  Cautionary Notice: The Annual Report referred to in 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 in the Annual Report, including without limitation, statements regarding potential revenue and future plans and objectives of Thunderbird 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 Thunderbird'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 Thunderbird's documents filed from time-to-time with the Euronext Amsterdam and other regulatory authorities. Included in the Annual Report are certain "non-IFRS financial measures," which are measures of Thunderbird's historical or estimated future performance that are different from measures calculated and presented in accordance with IFRS, within the meaning of applicable Euronext Amsterdam rules, that are useful to investors. These measures include (i) Property EBITDA consists of income from operations before depreciation and amortization, write-downs, reserves and recoveries, project development costs, corporate expenses, corporate management fees, merger and integration costs, income/(losses) on interests in non-consolidated affiliates and amortization of intangible assets. Property EBITDA is a supplemental financial measure we use to evaluate our country-level operations. (ii) Adjusted EBITDA represents net earnings before interest expense, income taxes, depreciation and amortization, equity in earnings of affiliates, minority interests, development costs, and gain on refinancing and discontinued operations. Adjusted EBITDA is a supplemental financial measure we use to evaluate our overall operations. Property EBITDA and Adjusted EBITDA are supplemental financial measures used by management, as well as industry analysts, to evaluate our operations. However, Property and Adjusted EBITDA should not be construed as an alternative to income from operations (as an indicator of our operating performance) or to cash flows from operating activities (as a measure of liquidity) as determined in accordance with generally accepted accounting principles.

Contact Information:
Albert Atallah
General Counsel
[email protected]

Peter LeSar
Chief Financial Officer
[email protected]
6192611138


Original Source: Thunderbird Resorts 2022 Annual Report Filed

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