News Column

Plaza Retail REIT announces solid 2nd quarter results

August 13, 2014

FREDERICTON, NB, Aug. 13, 2014 /CNW/ - Plaza Retail REIT (TSX: PLZ.UN) ("Plaza") today announced its results for the quarter ended June 30, 2014.

Plaza reported funds from operations ("FFO") of $7.0 million for the three months ended June 30, 2014, an increase of 44.8% over the same period in the prior year.  FFO per unit was $0.076 for the quarter ended June 30, 2014 ($0.076 per unit diluted) compared to $0.069 per unit for the quarter ended June 30, 2013 ($0.069 per unit diluted), an increase of 10.1% over the prior year.  FFO was positively impacted by an increase in same-asset net property operating income ("NOI"), incremental NOI from new developments/acquisitions and from the purchase of KEYreit.  Partly offsetting the increase in FFO was an increase in: administrative expenses; and finance costs (mainly due to the debt assumed on acquisition of KEYreit and higher overall leverage). 

For the six months ended June 30, 2014, Plaza reported FFO of $12.2 million, an increase of 38.3% over the same period in the prior year.  FFO per unit was $0.135 for the six months ended June 30, 2014 ($0.135 per unit diluted) compared to $0.132 per unit for the six months ended June 30, 2013 ($0.132 per unit diluted), an increase of 2.3%.  Excluding one-time expenses and one-time tax relating to the REIT conversion, FFO per unit would have been $0.142, a 4.4% increase over the prior year.  Excluding unusual NOI variances, FFO per unit would have been $0.145, a 6.6% increase over the prior year.

Michael Zakuta, President and CEO said, "We are pleased with our 2nd quarter results.  We had a very strong increase in our dollar and per unit FFO results for the quarter which more than offset one-time costs that impacted our 1st quarter results.  Plaza continues to execute on its strategy of building value for unitholders.  We're expecting continued positive cash flow contributions from new developments, our KEYreit acquisition, and our substantial refinancing program."

Overall Plaza recorded a loss of $4.3 million for the three months ended June 30, 2014 compared to a loss of $11.9 million, for the same period in the prior year.  For the six months ended June 30, 2014, Plaza recorded profit of $61.3 million compared to a loss of $3.4 million for the same period in the prior year.  Year-to-date profit was mainly impacted by: (i) the recording of a non-cash deferred income tax recovery of $59.7 million to reflect the flow-through tax status of Plaza as a REIT (whereby taxes are now only recorded for Plaza's taxable corporate subsidiaries); (ii) the increase in FFO; (iii) an increase in the net loss from non-cash fair value adjustments to investment properties mainly as a result of an increase in capitalization rates; and (iv) a non-cash fair value loss on convertible debentures.

Plaza's summary of FFO is presented below:













3 Months

Ended

June 30,

 2014

3 Months

Ended

June 30,

 2013

6 Months

Ended

June 30,

 2014

6 Months

Ended

June 30,

2013

(000s – except per unit amounts)

(unaudited)

(unaudited)

(unaudited)

(unaudited)











Profit (loss) for the period attributable to unitholders/shareholders

$  (4,640)

$  (12,119)

$    60,737

$ (3,832)

Add (deduct):









Transaction related costs on acquisition of KEYreit

-

9,061

-

9,061

Deferred income taxes

64

(1,159)

(59,635)

2,018

Refundable tax on disposals of investment properties

-

(410)

-

(410)

Fair value adjustment to investment properties

10,218

10,966

8,865

4,451

Fair value adjustment to investments

886

44

977

(1,238)

Fair value adjustment to convertible debentures

313

(1,518)

1,085

(1,868)

Equity accounting adjustment

24

-

83

747

Non-controlling interest adjustment

134

(33)

131

(76)

Basic and diluted FFO

$    6,999

$    4,832

$    12,243

$   8,853

Basic Weighted Average Units Outstanding

92,202

69,819

90,749

66,940

Diluted Weighted Average Units Outstanding

92,202

69,819

90,749

66,940

Basic and diluted FFO per unit

$    0.076

$    0.069

$      0.135

$   0.132



 

A copy of Plaza's quarterly report can be found on the Plaza's web site at www.plaza.ca or on SEDAR at www.sedar.com.

Plaza Retail REIT is a leading retail property owner and developer, particularly in Eastern Canada. Plaza has an entrepreneurial focus with strong "value-add" capabilities. Plaza's current portfolio includes interests in 330 properties totaling approximately 6.7 million square feet across Canada and additional lands held for development. Plaza's properties include a mix of strip plazas, stand-alone small box retail outlets and enclosed shopping centres, anchored by approximately 90% national tenants. Total assets have reached almost $1 billion. Plaza is fully internalized, therefore providing unitholders directly with the synergies that come with an internalized management structure. Plaza has proven its strong "value-add" capabilities to develop, redevelop and acquire retail real estate throughout Canada. Plaza has a strong track record of generating growth in distributions, having increased its distributions at least once every year in the last 11 years.

CAUTIONARY STATEMENTS REGARDING FORWARD LOOKING INFORMATION

This news release contains forward looking statements relating to our operations and the environment in which we operate, which are based on our expectations, estimates, forecasts and projections.  These statements are not future guarantees of future performance and involve risks and uncertainties that are difficult to control or predict.  Therefore, actual outcomes and results may differ materially from those expressed in these forward looking statements.  Readers, therefore, should not place undue reliance on any such forward looking statements.  Further, a forward looking statement speaks only as of the date on which such statement is made.  We undertake no obligation to publicly update any such statement, to reflect new information or the occurrence of future events or circumstances, except for forward-looking information disclosed in prior disclosures which, in light of intervening events, requires further explanation to avoid being misleading.

The TSX does not accept responsibility for the adequacy or accuracy of this release.



 


SOURCE Plaza Retail REIT


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