QUÉBEC, May 11, 2017 /CNW Telbec/
- Cominar Real Estate Investment Trust ("Cominar" or
the "REIT") (TSX: CUF.UN) announced today its results
for the first quarter of fiscal 2017.
Highlights for the Quarter Ended March
31, 2017
- Cominar completed its capital optimization program
- Decreased debt ratio to 52.0%
"During the quarter ended March 31, 2017, we completed
our capital optimization program by selling $93 million of
properties. This amount was used to reduce our debt ratio to
52.0%", said Gilles Hamel,
Executive Vice President and Chief Financial Officer of
Cominar.
"Our in-place occupancy rate has been impacted over the last
24 months in the retail segment by the bankruptcy of several
retailers, including Target, and in the office segment by the
federal government's policy of consolidating and reducing their
space requirements in the Ottawa
area", stated Michel Dallaire,
Chief Executive Officer. "During this period, our leasing teams
have done excellent work in re-leasing the space left vacant. As a
result of these efforts, 1.7 million square feet of vacant
space has been leased, but the clients are not yet in occupancy,
paying rent. The incremental rent that we will receive in the
coming quarters from these clients allows us to confirm the
sustainability of our distribution at current levels", added
Mr. Dallaire.
PRESENTATION OF RESULTS
For the quarter ended
March 31, 2017, operating
revenues were $214.0 million
compared to $221.4 million for
the corresponding period of 2016.
Net operating income(1) was $105.9 million compared to $113.7 million for the corresponding period
of 2016.
Net income for the first quarter of 2017 was $59.7 million compared to $68.1 million for the corresponding period of
2016.
Recurring funds from operations(1) for the
first quarter of 2017 were $61.0 million, while they were $69.3 million for the corresponding period of
2016. Fully diluted recurring funds from operations per
unit(1) amounted to $0.29 for this period.
Recurring adjusted funds from operations(1)
for the first quarter of 2017 were $52.5 million compared to $61.0 million for the corresponding period of
2016. Fully diluted per unit, they amounted to $0.29 for this period.
Cash flows provided by operating activities amounted to
$35.8 million, down 7.5%
compared to the corresponding period of 2016.
Recurring adjusted cash flows from
operations(1) for the first quarter of 2017 were
$53.3 million, compared to
$61.5 million for the
corresponding period of 2016. Fully diluted per unit, they amounted
to $0.29 for this period.
For the first quarter of 2017, operating revenues, net operating
income, recurring funds from operations, recurring adjusted funds
from operations as well as recurring adjusted cash flows from
operations decreased compared to the corresponding period of 2016,
due mainly to the dispositions of properties completed in 2016 and
2017.
FINANCIAL SITUATION
As at March
31, 2017, Cominar's debt ratio decreased to 52.0%,
down from 52.4% as at December 31, 2016. At the end of the
first quarter of 2017, total assets reached $8.3 billion, the unsecured revolving credit
facility utilized was $199.5 million, and cash available amounted
to $500.5 million.
DISPOSITIONS
During the quarter ended March 31,
2017, Cominar completed the sale of 10 income properties for
total net proceeds of $93.0 million.
This amount contributed to reduce our debt ratio to 52.0%.
LEASING ACTIVITY
During the first three months of
2017, our leasing efforts allowed us to renew 36.7% of the total
leasable area expiring during fiscal 2017. This situation resulted
from a more aggressive leasing policy that allowed Cominar to sign
new leases for 1.8 million square feet and to renew
3.0 million square feet, together representing 58.4% of the
spaces maturing in 2017.
Growth in the average net rent of renewed leases was 0.8% for
the first quarter of 2017.
Occupancy rate was 92.3% as at March 31,
2017, compared to 92.4% as at December 31, 2016.
SUBSEQUENT EVENT
On April 19,
2017, Cominar completed the sale of a retail property
located in the Québec area for a total of $0.9 million.
(1)
|
Non-IFRS financial
measure. See the reconciliation to closest IFRS
measure.
|
RESULTS OF
OPERATIONS
|
|
For the periods
ended March 31
|
2017
|
2016
|
% Δ
|
|
($000)
|
($000)
|
|
|
|
|
|
Operating
revenues
|
213,956
|
221,424
|
(3.4)
|
Operating
expenses
|
(108,073)
|
(107,754)
|
0.3
|
Net operating income
(1)
|
105,883
|
113,670
|
(6.9)
|
Finance
charges
|
(42,298)
|
(42,210)
|
0.2
|
Trust administrative
expenses
|
(4,484)
|
(3,997)
|
12.7
|
Share of joint
ventures' net income
|
831
|
711
|
16.9
|
Income
taxes
|
(219)
|
(93)
|
135.5
|
Net income
|
59,713
|
68,081
|
(12.3)
|
(1)
|
Non-IFRS financial
measure.
|
NON-IFRS FINANCIAL MEASURES
Net operating income,
funds from operations (FFO), adjusted funds from operations (AFFO)
and adjusted cash flows from operations (ACFO) 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.
FUNDS FROM OPERATIONS (FFO) AND ADJUSTED FUNDS FROM
OPERATIONS (AFFO)
The following table presents a
reconciliation of net income, as determined in accordance with
IFRS, and recurring funds from operations and recurring adjusted
funds from operations:
For the quarters
ended March 31
|
|
2017
|
2016
|
|
|
($000)
|
($000)
|
|
|
|
|
Net
income
|
|
59,713
|
68,081
|
+ Deferred
income taxes
|
|
219
|
93
|
+ Initial and
re-leasing salary costs
|
|
874
|
661
|
+ Capitalizable
interest on properties under development – joint
ventures
|
|
202
|
442
|
Recurring funds
from operations(1)(2)
|
|
61,008
|
69,277
|
|
|
|
|
-
Provision for leasing costs
|
|
(6,251)
|
(5,625)
|
-
Recognition of leases on a straight-line
basis(1)
|
|
(727)
|
(1,200)
|
- Capital
expenditures – maintenance of rental income generating
capacity
|
|
(1,557)
|
(1,418)
|
|
|
|
|
Recurring adjusted
funds from operations(1)(2)
|
|
52,473
|
61,034
|
(1)
|
Including
Cominar's proportionate share in joint ventures.
|
(2)
|
Non-IFRS financial
measure.
|
ADJUSTED CASH FLOWS FROM OPERATIONS (ACFO)
The
following table presents a reconciliation between the cash flows
provided by operating activities as per the condensed interim
consolidated financial statements and the recurring adjusted cash
flows from operations:
|
|
|
For the quarters
ended March 31
|
2017
|
2016
|
|
($000)
|
($000)
|
|
|
|
Cash flows
provided by operating activities as per the condensed interim
consolidated financial statements
|
35,753
|
38,632
|
+ Adjustments –
investments in joint ventures(1)
|
542
|
617
|
- Provision
for leasing costs
|
(6,251)
|
(5,625)
|
+ Initial and
re-leasing salary costs
|
874
|
661
|
+ Changes in
non-cash working capital items
|
23,056
|
27,205
|
- Capital
expenditures – maintenance of rental income generating
capacity
|
(1,557)
|
(1,418)
|
-
Amortization of deferred financing costs and others
|
(733)
|
(785)
|
+ Amortization
of fair value adjustments on assumed mortgages payable
|
1,420
|
1,804
|
+ Capitalizable
interest on properties under development – joint
ventures
|
202
|
442
|
Recurring adjusted
cash flows from operations(4)
|
53,306
|
61,533
|
Payout
ratio(2)
|
126.7%
|
102.1%
|
Cash flows payout
ratio(2)(3)
|
94.7%
|
102.1%
|
|
|
(1)
|
Including
Cominar's proportionate share in joint
ventures.
|
(2)
|
Fully
diluted.
|
(3)
|
The cash flows
payout ratio corresponds to the cash distribution per unit divided
by the fully diluted recurring adjusted cash flows from operations
per unit.
|
(4)
|
Non-IFRS financial
measure
|
ADDITIONAL FINANCIAL INFORMATION
Cominar's condensed
interim consolidated financial statements and interim management's
discussion and analysis for the first quarter ended March 31, 2017, 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 11,
2017
On Thursday, May 11,
2017 at 11 a.m. (ET), Cominar's management will hold a
conference call to present the results for the first quarter ended
March 31, 2017. 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, May 11, 2017 at 2 p.m. to Thursday, May
25, 2017 at 11:59 p.m., by
dialing 1 888 390-0541 followed by this code:
869839#.
PROFILE AS AT MAY 11,
2017
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 529 properties in three different market
segments, that is, office properties, retail properties and
industrial and mixed-use properties. Cominar's portfolio totals
44.1 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.
Cominar offers unitholders the opportunity to participate in its
Unitholder Distribution Reinvestment Plan, which allows them to
receive their monthly cash distributions as additional Cominar
units. Participants will be entitled to receive an additional
distribution equal to 3% of the distributions reinvested, which
will be reinvested in additional units. For more information and to
obtain a participation form, please visit Cominar's website at
www.cominar.com.
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