Doug Ashbury
Northern News Services

Yellowknife (Apr 12/00) - Pointing to conference postponements, lower Japanese tourist numbers due to Year 2000 concerns, and the delay of Diavik, Explorer Hotel owner Grandfield Pacific saw red for the nine months ended Jan. 31.

Despite these factors, the company predicts a turnaround.

"Management expects to see improving business opportunities in each of these target markets during the coming year, as well as additional sources of revenue from management's new sales initiatives," the company said.

Grandfield Pacific says conferences were postponed until late 2000 or 2001. As for Japanese tourists numbers, Raven Tours, the company responsible for bringing in the majority of aurora viewers, recently reported healthy numbers.

And as for the Diavik diamond mine, construction is to start this year. But Diavik may only get 40 per cent of its year-one construction completed.

"With respect to the year 2000 issue, along with a lot of other hotels, at the last minute there were a lot of cancellations," said Carol Richards, Grandfield Pacific's chief financial officer.

For the Explorer it meant groups that had planned to come during the new year postponed their trip, she said.

But occupancies during February and March - the first two months of the company's 1999-2000 final quarter - were good, she adds. Richards added that a few conference groups were unable to finalize their schedules while one group opted to hold a smaller event at their home site.

According to Grandfield Pacific's recently released unaudited nine-month results, the company lost $69,966, or one cent per share. For the same nine months in the prior fiscal year, the company made $469,136 - a gain of six cents per share.

For the third quarter ended Jan. 31, Grandfield Pacific lost $148,434 compared to a $149,461 gain in third quarter of the prior year.

As well, renovations at the Explorer continue to effect operating, repair and maintenance costs, but are nearing completion.

The Explorer did generate positive net earnings during the nine-month period but revenues were lower than the same nine months in the prior fiscal year, the company adds. Grandfield Pacific's other Yellowknife property, the Discovery Inn, generated 13.5 per cent, or $739,000 of the $5.5 million in total revenues.

Costs associated with Discovery Inn repairs and maintenance were higher than expected, the company said. Grandfield, which acquired the inn last year, also said the Discovery Inn was particularly affected by the Diavik delay.

The $5.5 million in total revenue was up from $5 million over the same period a year earlier.

Nine-month expenses rose to $2.3 million from $1.8 million. Assets rose to $14.9 million from $11.9 million.