News Column

Edgefront Real Estate Investment Trust Announces Q2 2014 Results and August and September 2014 Distributions

August 21, 2014

TORONTO and CALGARY, Aug. 21, 2014 /CNW/ - Edgefront Real Estate Investment Trust (the "REIT") (TSXV: ED.UN) announced today its results for the three and six months ending June 30, 2014.

Highlights

•Results in line with expectations; triple net leases generate predictable net operating income •AFFO per unit of $0.051 for the three months ended June 30, 2014•AFFO payout Ratio of 78.7% •Conservative debt to total assets ratio of 46.6% •Subsequent to quarter end, completed $36,744,000 accretive acquisition; closed offering issuing 8,750,000 units from treasury for gross proceeds to the REIT of $17,500,000; closed secondary offering by exercise in full of the underwriters' overallotment option of 875,000 units

Summary of Results

Included in the table that follows and elsewhere in this news release are non-IFRS measures that should not be construed as an alternative to net income / loss, cash from operating activities or other measures of financial performance calculated in accordance with IFRS, and may not be comparable to similar measures as reported by other issuers. Readers are encouraged to refer to the REIT's MD&A for further discussion of the non-IFRS measures presented. 









Three months ended June 30,

Six months ended June 30,



2014

2013

2014

2013

Financial Highlights

$

$

$

$

Funds from operations (FFO)

839,761

(557,710)

1,477,455

(570,214)

Adjusted funds from operations (AFFO)

1,007,831

(585,574)

1,793,471

(569,593)

Distributions declared (1)

792,763

-

1,465,846

-

Weighted average units outstanding – basic (2)

19,810,711

2,750,000

18,559,549

2,750,000

Weighted average units outstanding – diluted (2)

19,827,219

2,750,000

18,559,549

2,750,000

Distributions per unit (1) (2)

0.040

N/A

0.079

N/A

FFO per unit (2)











Basic







0.042

(0.203)

0.080

(0.207)



Diluted

0.042

(0.203)

0.080

(0.207)

AFFO per unit (2)











Basic

0.051

(0.213)

0.097

(0.207)



Diluted

0.051

(0.213)

0.097

(0.207)

AFFO payout ratio (1)

78.7%

N/A

81.7%

N/A

Debt to total assets ratio

46.6%

38.7%

46.6%

38.7%







(1)

 Includes distributions payable to holders of Class B LP Units which are accounted for as interest expense in the unaudited condensed consolidated interim financial statements. 

(2)

 Weighted average number of units includes the Class B LP Units and for June 30, 2013 has been adjusted to reflect the 20 for 1 exchange of shares of the Corporation for units of the REIT in connection with the plan of arrangement completed January 13, 2014.



 



Three months ended June 30,

Six months ended June 30,



2014

2013

2014

2013

Financial Results

$

$

$

$

Rental income

1,771,095

164,223

3,299,566

174,721

Net rental income

1,460,724

74,759

2,725,163

80,616

Net income

699,765

(89,247)

410,844

(131,314)







Net income for the six months ended June 30, 2014 was reduced by a fair value adjustment of investment properties in Q1, equal to the acquisition costs incurred in relation to the acquisition completed in that quarter of $915,346. Excluding this item, net income for the six months ended June 30, 2014 would have been $1,326,190.







"We are pleased to see the positive impact of the RTL Westcan acquisition for a full quarter in line with expectations. On July 15, 2014 we completed an accretive acquisition of $36,744,000, consisting of three additional high quality industrial properties located in Alberta by leveraging our strategic partnership with TriWest Capital Partners. We will continue to identify and pursue accretive growth opportunities in the quarters ahead" said Kelly Hanczyk, the REIT's President and Chief Executive Officer. 

Revenues and Results from Operations In Line with Expectations

Rental income increased to $1,771,095 in the quarter as compared to $164,233 in the same quarter of 2013 and $1,528,471 in the first quarter.    

Net rental income grew to $1,460,724 in the quarter as compared to $74,759 in same quarter of 2013 and $1,264,439 in the first quarter. 

The REIT generated FFO and AFFO of $839,761 and $1,007,831 respectively in the quarter ended June 30, 2014, with FFO and AFFO per unit of $0.042 and $0.051 respectively. 

The REIT's AFFO payout ratio for the quarter was 78.7%.

The REIT's current distribution per unit continues to be $0.01333 per month. The REIT's distribution reinvestment program ("DRIP") entitles eligible unitholders to elect to receive all, or a portion of the cash distributions of the REIT reinvested in units of the REIT. Eligible unitholders who so elect will receive a bonus distribution of units equal to 3% of each distribution that was reinvested by them under the DRIP.

Balance Sheet and Liquidity

The REIT's debt to total assets ratio was 46.6% at June 30, 2014, and its interest coverage ratio 3.21 times for the quarter then ended. The REIT intends to maintain a debt to total assets ratio of less than 55%.

Accretive Growth Subsequent to Quarter End

On July 15, 2014, the REIT completed a public offering of units. Under the offering, 8,750,000 units were issued from treasury, generating gross proceeds of $17,500,000 to the REIT.  On the same date, the REIT acquired three investment properties located in Alberta for an aggregate purchase price of $36,744,000.  The blended capitalization rate of the acquisitions was 8.2%.

In addition to increasing market capitalization by $17,500,000, the completion of the offering, together with the full exercise of the underwriters' overallotment option, provides significantly improved liquidity for the REIT.  The properties acquired will contribute $3,000,000 a year of net rental income from triple net leases with embedded rent increases indexed to inflation.  As disclosed in the short form prospectus dated July 4, 2014, twelve month forecast AFFO per unit subsequent to the prospectus offering and acquisitions is $0.21.  Based on the current annualized distributions of $0.16 per unit paid by the REIT, the forecast AFFO payout ratio is 77%.     

August and September 2014 Distributions

The REIT will make a cash distribution in the amount of $0.01333 per unit, representing $0.16 on an annualized basis, payable September 15, 2014 to unitholders of record as of August 29, 2014.

The REIT will also make a cash distribution in the amount of $0.01333 per unit, representing $0.16 on an annualized basis, payable October 15, 2014 to unitholders of record as of September 30, 2014.

About the REIT

Edgefront REIT is a growth oriented real estate investment trust focused on increasing unitholder value through the acquisition, ownership and management of industrial properties located in primary and secondary markets in North America, with an initial focus on Western Canada. Edgefront REIT currently owns a portfolio of 15 properties comprising approximately 748,000 square feet of rentable area.

The REIT has approximately 28,293,775 units issued and outstanding. Additionally, there are 360,000 Class B LP units of Edgefront Limited Partnership issued and outstanding.

FORWARD LOOKING STATEMENTS

Certain statements contained in this new release constitute forward-looking statements which reflect the REIT's current expectations and projections about future results. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the REIT to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this news release.  Such forward-looking statements are based on a number of assumptions that may prove to be incorrect.

While the REIT anticipates that subsequent events and developments may cause its views to change, the REIT specifically disclaims any obligation to update these forward-looking statements except as required by applicable law. These forward-looking statements should not be relied upon as representing the REIT's views as of any date subsequent to the date of this news release. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The factors identified above are not intended to represent a complete list of the factors that could affect the REIT.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Edgefront Real Estate Investment Trust


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: Canada Newswire


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters