QUÉBEC, May 5, 2016 /CNW Telbec/
- Cominar Real Estate Investment Trust ("Cominar" or
the "REIT")(TSX: CUF.UN) announced today its results
for the first quarter of fiscal 2016.
Highlights for the Quarter Ended March
31, 2016
- Increased cash flows provided by operating activities of
27.9%
- Disposition of income properties for $71.7M
- Repurchase of units under the NCIB for $40.8M
- Increased occupancy rate to 92.5%
- Increased minimum average rent of renewed leases of 0.9%
"Since our capital optimization strategy was adopted in
September 2015, we completed sales of
properties for a total of $210 million, including $71.7 million during the first quarter of 2016
and $39.5 million after quarter end,"
said Michel Dallaire, Chief
Executive Officer of Cominar.
"The proceeds from the sales of properties were used to pay down
our debt and repurchase units under the NCIB for a consideration of
$48.5 million, including
$40.8 million during the first
quarter of 2016. In addition, in order not to offset the advantages
generated by the repurchases of units, we have suspended the
distribution reinvestment plan in January
2016," said Gilles Hamel,
Executive Vice President and Chief Financial Officer of
Cominar.
PRESENTATION OF RESULTS
For the quarter ended March 31,
2016, operating revenues amounted to $221.4 million, compared to $229.4 million for the corresponding period
of 2015. This decrease resulted primarily from the dispositions of
income properties completed in 2015 and 2016 as well as the
decreased overall occupancy rate.
Net operating income(1) reached $113,7 million compared to $119.1 million for the same period of 2015.
This decrease resulted primarily from the dispositions of income
properties completed in 2015 and 2016 as well as the decreased
overall occupancy rate.
Net income for the first quarter of 2016 amounted to
$68.1 million, down $3.1 million compared to net income for the
corresponding period of 2015. This $3.1 million decrease results from the
$5.4 million decrease in net
operating income explained above, which was partially offset by a
reduction in finance charges of $1.9 million, a reduction in Trust
administrative expenses of $0.2 million and an increase in share of
joint ventures' net income of $0.2 million.
Cash flows provided by operating activities reached
$38.6 million for the first
quarter of 2016, up 27.9% compared to the corresponding period of
2015.
Recurring funds from operations(1) amounted to
$68.8 million, while
recurring funds from operations per unit fully
diluted(1) amounted to $0.41 for the first quarter of 2016.
Recurring adjusted funds from operations(1)
for the first quarter of 2016 amounted to $59.8 million. Fully diluted per unit, they
amounted to $0.35.
FINANCIAL SITUATION
As at March
31, 2016, Cominar's debt ratio was at 54.2 % and
total assets amounted to $8.2 billion. As at the end of the quarter,
the unsecured revolving credit facility used was $358.6 million, down $22.5 million from December 31, 2015. Cash available was
$341.4 million as at
March 31, 2016.
LEASING ACTIVITIES
During the first quarter of 2016,
Cominar's occupancy rate increased by 0.6%, from 91.9% as at
December 31, 2015 to 92.5% as at
March 31, 2016. In addition, the
average minimum rent of renewed leases during the quarter increased
by 0.9%.
DISPOSITIONS
On January 29,
2016, Cominar completed the sale of a portfolio of 10 retail
properties located in Quebec and
Ontario, for a total price of
$15.2 million, at a
capitalization rate of 6.7%.
On March 31, 2016, Cominar
completed the sale of a portfolio of 14 retail properties located
in Quebec and Ontario, for a total price of $56.5 million, at a capitalization rate of
7.1%.
The sale proceeds of these properties were used to reimburse a
portion of the credit facility as well as to repurchase units under
the NCIB.
FINANCING
During the first quarter of 2016, Cominar
contracted mortgages payable for $119.9 million at a weighted average
contractual rate of 3.40% and for a weighted average term of 10
years.
(1)
|
Non-IFRS financial
measure. See relevant section for reconciliation to closest IFRS
measure.
|
SHARES
During the first quarter of 2016, Cominar has
repurchased 2,717,396 units under the NCIB for a total
consideration of $40.8 million
and announced the suspension of the distribution reinvestment
plan.
This suspension does not affect the regular monthly cash
distribution.
SUBSEQUENT EVENT AFTER MARCH 31,
2016
On May 2, 2016, Cominar completed the
sale of a portfolio of five retail properties located in Québec and
Montréal, for a total price of $39.5 million, with a capitalization rate of
7.0%.
RESULTS OF
OPERATION
|
|
|
|
|
|
|
|
For the quarters
ended March 31
|
2016
|
2015
|
% Δ
|
|
|
|
|
Operating
revenues
|
221,424
|
229,411
|
(3.5)
|
Operating
expenses
|
107,754
|
110,345
|
(2.3)
|
Net operating
income(1)
|
113,670
|
119,066
|
(4.5)
|
Finance
charges
|
(42,210)
|
(44,142)
|
(4.4)
|
Trust administrative
expenses
|
(3,997)
|
(4,227)
|
(5.4)
|
Share of joint
ventures' net income and comprehensive income
|
711
|
557
|
27.6
|
Income
taxes
|
(93)
|
(101)
|
(7.9)
|
Net income
|
68,081
|
71,153
|
(4.3)
|
Net income by share
(diluted)
|
0.40$
|
0.40$
|
(7.0)
|
(1)
|
Non-IFRS financial
measure. See relevant section for reconciliation to closest IFRS
measure.
|
NON-IFRS FINANCIAL MEASURES
Net operating income,
recurring funds from operations (FFO) and recurring adjusted funds
from operations (AFFO) are not measures recognized by International
Financial Reporting Standards ("IFRS") and do not have standardized
meanings prescribed by IFRS. Such measures may differ from similar
computations as reported by similar entities and, accordingly, may
not be comparable to similar measures reported by such other
entities.
The following table presents a reconciliation of cash flows
provided by operating activities as shown in the condensed interim
consolidated financial statements to recurring adjusted funds from
operations:
For the quarters
ended March 31
|
2016
|
2015
|
|
|
|
Cash flows
provided by operating activities as shown in the condensed interim
consolidated financial statements
|
38,632
|
30,201
|
+
|
Adjustments -
investments in joint ventures(2)
|
632
|
322
|
-
|
Amortization of other
assets
|
(238)
|
(238)
|
-
|
Provision for leasing
costs
|
(5,625)
|
(5,800)
|
+
|
Initial and
re-leasing salary costs
|
661
|
729
|
+
|
Change in non-cash
working capital items
|
27,205
|
38,483
|
-
|
Capital expenditures
– maintenance of rental income generating capacity
|
(1,418)
|
(1,181)
|
Recurring adjusted
funds from operations(1)
|
59,849
|
62,516
|
(1)
|
Non-IFRS financial
measure. See relevant section for reconciliation to closest IFRS
measure.
|
(2)
|
Including Cominar's
proportionate share in joint ventures.
|
The following table presents a reconciliation of cash flows
provided by operating activities as shown in the condensed interim
consolidated financial statements to recurring funds from
operations:
For the quarters
ended March 31
|
2016
|
2015
|
|
|
|
Cash flows
provided by operating activities as shown in the
condensed
interim consolidated financial statements
|
38,632
|
30,201
|
-
|
Adjustments –
investments in joint ventures(2)
|
(87)
|
(38)
|
+
|
Amortization
|
774
|
1,301
|
-
|
Compensation expense
related to long-term incentive plan
|
(261)
|
(469)
|
+
|
Recognition of leases
on straight-line basis(1)
|
1,200
|
1,419
|
+
|
Excess of
proportionate share of net income and comprehensive income over
distributions received from the joint ventures
|
711
|
357
|
+
|
Initial and
re-leasing salary costs
|
661
|
729
|
+
|
Change in non-cash
working capital items
|
27,205
|
38,483
|
Recurring funds from
operations(1)
|
68,835
|
71,983
|
(1)
|
Non-IFRS financial
measure. See relevant section for reconciliation to closest IFRS
measure.
|
(2)
|
Including Cominar's
proportionate share in joint ventures.
|
ADDITIONAL FINANCIAL INFORMATION
Cominar's condensed
interim consolidated financial statements and interim report for
the quarter ended March 31, 2016,
will be filed with SEDAR at www.sedar.com and will be available on
Cominar's website at www.cominar.com.
CONFERENCE CALL ON MAY 5,
2016
On Thursday, May 5,
2016 at 11 a.m. (ET), Cominar's management will hold a
conference call to present the results for quarter ended
March 31, 2016. Anyone who is
interested may take part in this call by dialing
1 888 390-0605. A presentation regarding these
results will be available before the conference call on the REIT's
website at www.cominar.com, under the Conference Call header.
In addition, a taped rebroadcast of the conference call will be
available from Thursday, May 5, 2016
at 2 p.m. to Thursday, May 12,
2016 at 11:59 p.m., by dialing
1 888 390-0541 followed by this code:
529305 #.
PROFILE AS AT MAY 5,
2016
Cominar is the third largest diversified real
estate investment trust in Canada
and currently remains the largest commercial property owner in the
Province of Quebec. The REIT owns
a real estate portfolio of 537 properties in three different
market segments, that is, office properties, retail properties and
industrial and mixed-use properties. Cominar's portfolio totals
44.8 million square feet spread out across Quebec, Ontario, the Atlantic Provinces and
Western Canada. Cominar's
objectives are to pay growing cash distributions to unitholders and
to maximize unitholder value through proactive management and the
expansion of its portfolio.
FORWARD-LOOKING STATEMENTS
This press release may
contain forward-looking statements with respect to Cominar and its
operations, strategy, financial performance and financial
condition. These statements generally can be identified by the use
of forward-looking words such as "may", "will", "expect",
"estimate", "anticipate", "intend", "believe" or "continue" or the
negative thereof or similar variations. The actual results and
performance of Cominar discussed herein could differ materially
from those expressed or implied by such statements. Such statements
are qualified in their entirety by the inherent risks and
uncertainties surrounding future expectations. Some important
factors that could cause actual results to differ materially from
expectations include, among other things, general economic and
market factors, competition, changes in government regulation and
the factors described under "Risk Factors" in Cominar's Annual
Information Form. The cautionary statements qualify all
forward-looking statements attributable to Cominar and persons
acting on its behalf. Unless otherwise stated, all forward-looking
statements speak only as of the date of this press release. Cominar
does not assume any obligation to update the aforementioned
forward-looking statements, except as required by applicable
laws.
SOURCE COMINAR REAL ESTATE INVESTMENT TRUST