QUÉBEC, Aug. 4, 2016 /CNW Telbec/
- Cominar Real Estate Investment Trust ("Cominar" or the
"REIT") (TSX: CUF.UN) announced today its results for the
second quarter of fiscal 2016.
Highlights for the Quarter Ended June 30,
2016
- Increased occupancy rate to 92.6%
- Disposition of income properties for $39.3M
"At the operational level, our more aggressive leasing policy
helped us to sign new leases aggregating 2.3 million square feet
since the beginning of the year, which is much higher than the
total of new leases signed during the year 2015. This excellent
performance contributed to increase our occupancy rate to 92.6% as
at June 30, 2016, up 0.7% from
December 31, 2015," said Michel Dallaire, Chief Executive Officer and
Chairman of the Board of Trustees of Cominar.
"During the quarter, we pursued our capital optimization
strategy through property dispositions for a total price of
$39.3 million. The proceeds from the
sale of these properties were used to pay down our debt, according
to our financial management principles for maintaining a strong and
healthy balance sheet on a long-term basis," said Gilles Hamel, Executive Vice President and Chief
Financial Officer of Cominar.
PRESENTATION OF RESULTS
For the quarter ended
June 30, 2016, operating
revenues amounted to $217.3 million, compared to $224.8 million for the corresponding period
of 2015. This decrease resulted primarily from the dispositions of
income properties completed in 2015 and 2016.
Net operating income(1) reached $116,1 million compared to $122.8 million for the corresponding period
of 2015. This decrease resulted primarily from the dispositions of
income properties completed in 2015 and 2016.
Net income for the second quarter of 2016 amounted to
$69.8 million, down $4.5 million compared to net income for the
corresponding period of 2015. This decrease results from the
$6.7 million decrease in net
operating income explained above, which was partially offset by a
reduction in finance charges of $2.3 million.
Cash flows provided by operating activities reached
$23.2 million for the second
quarter of 2016, compared to $25.4 million for the corresponding period
of 2015.
Recurring funds from operations(1) amounted to
$70.9 million, while
recurring funds from operations per unit fully
diluted(1) amounted to $0.42 for the second quarter of 2016.
Recurring adjusted funds from operations(1)
for the second quarter of 2016 amounted to $61.8 million. Fully diluted per unit, they
amounted to $0.37.
(1) Non-IFRS financial measure. See reconciliation to closest
IFRS measure.
FINANCIAL SITUATION
As at June 30, 2016, Cominar's
debt ratio was at 54.4 % and total assets
amounted to $8.3 billion. As at
the end of the quarter, the unsecured revolving credit facility
used was $246.5 million, down
$134.7 million from December 31, 2015. Cash available was
$453.5 million as at
June 30, 2016.
LEASING ACTIVITIES
During the first half of 2016, our
leasing efforts in the retail segment have increased the occupancy
rate by 1.9% in this segment, thereby contributing to the increase
of 0.7% in overall occupancy rate, from 91.9% as at December 31, 2015, to 92.6% as at June 30, 2016. This increase is the result of a
more aggressive leasing policy that allowed Cominar to sign new
leases for a total of 2.3 million square feet since the
beginning of the year.
DISPOSITIONS
During the second quarter, in line with
our capital optimization strategy, we completed the sale of a
portfolio of 5 retail properties located in Quebec, for a total price of $39.3 million, at a capitalization rate of
7.0%. The proceeds from the sale of these properties were used to
pay down our debt. Since the beginning of 2016, income properties
were sold for a total price of $109.7
million, which confirmed the assessed value of our
properties in our books. As at June 30,
2016, the portfolio of income properties held for sale over
the coming quarters was worth $149.0
million.
FINANCING
During the second quarter, in accordance
with its prudent debt management principles, Cominar early
refinanced Series 6 unsecured debentures maturing in
September 2016 by issuing
$225 million Series 10 unsecured
debentures bearing interest at 4.247% and maturing in 2023.
RESULTS OF OPERATION
(in thousands of Canadian dollars, except per unit amounts)
|
Quarter
|
|
Year-to-date (six
months)
|
For the periods ended
June 30
|
2016
|
2015
|
%
Δ
|
|
2016
|
2015
|
%
Δ
|
|
|
|
|
|
|
|
|
Operating
revenues
|
217,262
|
224,769
|
(3.3)
|
|
438,686
|
454,180
|
(3.4)
|
Operating
expenses
|
101,193
|
101,976
|
(0.8)
|
|
208,947
|
212,321
|
(1.6)
|
Net operating
income(1)
|
116,069
|
122,793
|
(5.5)
|
|
229,739
|
241,859
|
(5.0)
|
Finance
charges
|
(42,710)
|
(44,994)
|
(5.1)
|
|
(84,920)
|
(89,136)
|
(4.7)
|
Trust administrative
expenses
|
(3,980)
|
(4,100)
|
(2.9)
|
|
(7,977)
|
(8,327)
|
(4.2)
|
Share of joint ventures'
net income and comprehensive income
|
701
|
697
|
0.6
|
|
1,412
|
1,254
|
12.6
|
Income
taxes
|
(293)
|
(110)
|
166.4
|
|
(386)
|
(211)
|
82.9
|
Net
income
|
69,787
|
74,286
|
(6.1)
|
|
137,868
|
145,439
|
(5.2)
|
Net income by share
(diluted)
|
$0.41
|
$0.44
|
(6.8)
|
|
$0.82
|
$0.87
|
(5.7)
|
(1) Non-IFRS
financial 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:
(in thousands of Canadian dollars)
|
Quarter
|
|
Year-to-date (six
months)
|
For the periods ended
June 30
|
2016
|
2015
|
|
2016
|
2015
|
|
|
|
|
|
|
Cash flows provided by
operating activities as shown in the condensed interim consolidated
financial statements
|
23,214
|
25,427
|
|
61,846
|
55,628
|
+
|
Adjustments – Investments in joint
ventures(2)
|
682
|
606
|
|
1,314
|
872
|
-
|
Amortization of other assets
|
(327)
|
(224)
|
|
(565)
|
(462)
|
-
|
Provision for leasing costs
|
(5,975)
|
(5,600)
|
|
(11,600)
|
(11,400)
|
+
|
Initial and re-leasing salary costs
|
775
|
662
|
|
1,436
|
1,391
|
+
|
Change in non-cash working capital
items
|
45,440
|
46,527
|
|
72,645
|
85,010
|
-
|
Capital expenditures – maintenance of rental income
generating capacity
|
(2,021)
|
(1,743)
|
|
(3,439)
|
(2,924)
|
+
|
Accretion of the liability component of convertible
debentures
|
—
|
56
|
|
—
|
112
|
|
|
|
|
|
|
Recurring adjusted funds
from operations(1)(2)
|
61,788
|
65,711
|
|
121,637
|
128,227
|
(1)
|
Non-IFRS financial
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:
(in thousands of Canadian dollars)
|
Quarter
|
|
Year-to-date (six
months)
|
For the periods ended
June 30
|
2016
|
2015
|
|
2016
|
2015
|
|
|
|
|
|
|
Cash flows provided by
operating activities as shown
in the condensed interim consolidated financial
statements
|
23,214
|
25,427
|
|
61,846
|
55,628
|
+
|
Amortization
|
573
|
(65)
|
|
1,347
|
1,236
|
-
|
Compensation expense related to long-term incentive
plan
|
(277)
|
(524)
|
|
(538)
|
(993)
|
+
|
Recognition of leases on straight-line
basis
|
429
|
2,334
|
|
1,542
|
3,715
|
+
|
Excess of proportionate share of net income and
comprehensive income over distributions received from the joint
ventures
|
701
|
697
|
|
1,412
|
1,054
|
+
|
Initial and re-leasing salary costs
|
775
|
662
|
|
1,436
|
1,391
|
+
|
Change in non-cash working capital
items
|
45,440
|
46,527
|
|
72,645
|
85,010
|
+
|
Write-off of deferred financing
costs
|
—
|
1,130
|
|
—
|
1,130
|
|
|
|
|
|
|
Recurring funds from
operations(1)(2)
|
70,855
|
76,188
|
|
139,690
|
148,171
|
(1)
|
Non-IFRS financial
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 June 30, 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 AUGUST 4,
2016
On Thursday, August 4,
2016 at 11 a.m. (ET), Cominar's management will hold a
conference call to present the results for quarter ended
June 30, 2016. Anyone who is
interested may take part in this call by dialing
1 888 390-0546. 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, August 4,
2016 at 2 p.m. to Thursday,
August 11, 2016 at 11:59 p.m.,
by dialing 1 888 390-0541 followed by this
code: 526519 #.
PROFILE AS AT AUGUST 4,
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 538 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