TORONTO, ONTARIO–(Marketwired – May 11, 2015) –
NOT FOR DISSEMINATION IN THE UNITED STATES OR TO ANY NON-CANADIAN SOURCE
Retrocom Real Estate Investment Trust (the “REIT”) (TSX:RMM.UN) today announced results for the first quarter ended March 31, 2015.
Subsequent to quarter-end:
- On May 1, 2015, the REIT secured a new $80 million mortgage loan bearing an interest rate of 3.48% and 10 year term, which replaces a maturing $34 million mortgage loan bearing an interest rate of 5.29%.
- Decreased the weighted average cost of mortgage debt at May 1, 2015 to 4.62% compared to 4.83% at March 31, 2015 and compared to 5.03% at March 31, 2014.
Highlights:
- Net operating income (“NOI”) was $18.6 million for the three months ended March 31, 2015, an 18.6% increase compared to $15.7 million for the same period in 2014.
- Funds from Operations (“FFO”) was $9.1 million for the three months ended March 31, 2015, a 19.4% increase compared to $7.6 million for the same period in 2014.
- FFO per unit was $0.106 for the three months ended March 31, 2015 which remained consistent compared to the same period in 2014.
- Debt to gross book value ratio (excluding convertible debentures) as at March 31, 2015 was 50.8% compared to 50.7% at December 31, 2014 and debt to gross book value ratio (including convertible debentures) as at March 31, 2015 was 57.9% compared to 57.7% at December 31, 2014.
- $30 million redevelopment of the Golden Mile Shopping Centre in Regina, Saskatchewan commenced, which includes the construction of a new 92,000 square foot Real Canadian Superstore® leased to Loblaws, and renovation of the balance of the shopping centre. The REIT has arranged construction financing for the redevelopment with a Canadian Chartered Bank.
Richard Michaeloff, President and CEO of the REIT, said “The financial results for the first quarter continue to trend positively and we are pleased with our continuing growth. We believe we have made significant progress in improving the size and quality of our portfolio as reflected by our steady improvement in cash flow. We are also maximizing value in our existing assets, as evidenced in our recently announced redevelopment at the Golden Mile Shopping Centre in Regina, Saskatchewan.”
Financial Highlights
| Three months ended March 31 | ||||||
| (all amounts in $000’s, except per unit amounts and ratios) | 2015 | 2014 | ||||
| Rental revenue and other income | 31,252 | 28,007 | ||||
| Property operating expenses | 13,109 | 12,793 | ||||
| Property operating income | 18,143 | 15,214 | ||||
| Share of joint venture net operating income | 452 | 463 | ||||
| Net operating income (1) | 18,595 | 15,677 | ||||
| Trust expenses | 1,039 | 1,083 | ||||
| Finance costs – joint venture operations | 198 | 208 | ||||
| Finance costs – operations | 8,336 | 6,833 | ||||
| Finance costs – distributions on Class B Units | 1,240 | 1,125 | ||||
| Income before fair value gains (losses) | 7,782 | 6,428 | ||||
| Fair value losses associated with financial instrument | (8,482 | ) | (6,186 | ) | ||
| Fair value losses on investment property | (755 | ) | (711 | ) | ||
| Fair value gains on joint venture property | 58 | 107 | ||||
| Net loss for the period | (1,397 | ) | (362 | ) | ||
| FFO (2) | 9,051 | 7,582 | ||||
| FFO per unit | $ | 0.106 | $ | 0.106 | ||
| FFO payout ratio | 106.1 | % | 106.1 | % | ||
| Distributions per unit | $ | 0.1125 | $ | 0.1125 | ||
Full Financial Results and MD&A will be available on SEDAR (www.sedar.com) as well as the Investors Relations section of the REIT’s website (www.retrocomreit.com).
| (1) | A non-IFRS measurement, calculated by the REIT as rental revenue (net rents, property tax and operating cost recoveries, as well as other miscellaneous income from tenants) less operating expenses for properties. |
| (2) | The reconciliations from net income (loss) to Funds from Operations are included in the REIT’s MD&A. |
The REIT’s management considers Net Operating Income, Funds from Operations and Debt to Gross Book Value ratio to be indicative measures in evaluating the REIT’s performance. The table above includes non-IFRS information that should not be construed as an alternative to net income or cash flows from operations and may not be comparable to similar measures presented by other issuers as there is no standardized meaning prescribed by IFRS.
Conference Call
Retrocom REIT will hold a conference call on Tuesday, May 12, 2015 at 11:00 am (ET). Participating on the call will be members of the REIT’s senior management.
Investors are invited to access the call by dialling 416-204-9702 or 1-800-524-8850. A recording of this call will be made available Tuesday, May 12, 2015 beginning at 2:00 pm (ET) through to Tuesday, May 26, 2015 ending at 2:00pm (ET). To access the recording, please call 647-436-0148 or 1-888-203-1112 and use the reservation number 9075776.
About Retrocom REIT
Retrocom REIT is an unincorporated, open-end real estate investment trust which focuses on owning and acquiring retail properties across Canada with the goal of enhancing long-term Unitholder value.
Forward-Looking Information
This press release contains forward-looking statements, which reflect management’s expectations regarding the REIT’s future growth, results of operations, performance, and business prospects and opportunities. These statements relate to, but are not limited to, the REIT’s expectations, intentions, plans and beliefs. In some cases, forward-looking statements can be identified by the use of words such as “may”, “will”, “should”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “continue” or the negative or grammatical variations of these terms or other comparable terminology. Readers should be aware that these statements are subject to known and unknown risks, uncertainties and other factors, including, but not limited to: those discussed or referenced under the heading “Risk Factors” in the REIT’s Management’s Discussion and Analysis for the three months ended March 31, 2015, as well as competition within the commercial real estate sector, the effective international, national and regional economic conditions and the availability of capital to fund further investments in the REIT’s business. Actual events or results may differ materially from those suggested by any forward-looking statements. Readers should not place undue reliance on any forward-looking statements contained in this press release. By their nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. Although management of the REIT believes that the expectations reflected in the forward-looking statements are reasonable, there can be no assurance that future results, levels of activity, performance or achievements will occur as anticipated. Neither the REIT nor any other person assumes responsibility for the accuracy and completeness of any forward-looking statements, and no one has any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or such other factors which affect this information, except as required by law.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, which may be made only by means of a prospectus, nor shall there be any sale of the Units in any state, province or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under securities laws of any such state, province or other jurisdiction. The Units of the Retrocom REIT have not been, and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered, sold or delivered in the United States absent registration or an exemption from the registration requirements of U.S. securities laws.
Richard Michaeloff
Chief Executive Officer
(416) 741-7999
(416) 741-7993 (FAX)
rmichaeloff@rmmreit.com
www.retrocomreit.com