WINNIPEG, MB, May 27, 2021 /CNW/ – Lanesborough Real Estate Investment Trust (“LREIT”) (TSXV: LRT.UN) today reported its operating results for the quarter ended March 31, 2021. The following comments in regard to the financial position and operating results of LREIT should be read in conjunction with Management’s Discussion & Analysis and the financial statements for the quarter ended March 31, 2021, which may be obtained from the SEDAR website at www.sedar.com.
ANALYSIS OF OPERATING RESULTS
|
Analysis of Loss and Comprehensive Loss |
||||||||||
|
Three Months Ended March 31 |
Increase (Decrease) in Income |
|||||||||
|
2021 |
2020 |
Amount |
% |
|||||||
|
Rentals from investment properties |
$ |
4,275,535 |
$ |
4,330,705 |
$ |
(55,170) |
(1)% |
|||
|
Property operating costs |
(3,243,590) |
(3,225,041) |
(18,549) |
(1)% |
||||||
|
Net operating income (NOI) |
1,031,945 |
1,105,664 |
(73,719) |
(7)% |
||||||
|
Interest income |
43,179 |
48,466 |
(5,287) |
(11)% |
||||||
|
Interest expense |
(3,193,980) |
(4,463,691) |
1,269,711 |
28% |
||||||
|
Trust expense |
(313,485) |
(358,996) |
45,511 |
13% |
||||||
|
Loss before the following |
(2,432,341) |
(3,668,557) |
1,236,216 |
34% |
||||||
|
Fair value adjustments |
(7,640,568) |
(2,963,262) |
(4,677,306) |
(158)% |
||||||
|
Loss before discontinued operations |
(10,072,909) |
(6,631,819) |
(3,441,090) |
(52)% |
||||||
|
Loss from discontinued operations |
(498,338) |
(471,264) |
(27,074) |
(6)% |
||||||
|
Loss and comprehensive loss |
$ |
(10,571,247) |
$ |
(7,103,083) |
$ |
(3,468,164) |
(49)% |
|||
Overall Results
LREIT completed Q1-2021 with a loss and comprehensive loss of $10.6 million, compared to a loss and comprehensive loss of $7.1 million during Q1-2020. The increase in the extent of the loss and comprehensive loss is mainly due to an increase in the loss relating to fair value adjustments, partially offset by a decrease in interest expense.
Losses from fair value adjustments recognized during Q1-2021 of $7.6 million (Q1-2020 â $3.0 million) mainly reflect a decrease in the carrying value of the Fort McMurray properties as a result of a reduction in normalized rent potential and an increase in normalized property operating costs. The normalized rent potential was reduced to reflect the rental rates that are considered to be achievable in the Fort McMurray market and the normalized operating costs were increased to reflect the impact of a further hardening of the insurance market on normalized insurance premiums.
The decrease in interest expense during Q1-2021 mainly reflects a $0.9 million decrease in interest on the revolving loan from 2668921 Manitoba Ltd. (“revolving loan”) and a $0.4 million decrease in mortgage loan interest. The decrease in interest on the revolving loan was primarily due to a reduction in the interest rate from 7% to 2% per annum which became effective January 1, 2021. The decrease in mortgage loan interest was primarily due to the decrease in the weighted average interest rate on LREIT’s mortgage loan debt, which decreased from 5.7% as at March 31, 2020 to 5.3% as at March 31, 2021. The decrease in the weighted average interest rate was mainly due to a reduction in the interest rate on the mortgage loan secured by a second charge over the property known as Nelson Ridge, which decreased from 9% to 2% per annum, effective January 1, 2021, as well as the impact on LREIT’s variable rate mortgages from reductions in the prime rate of interest made during and subsequent to Q1-2020.
ABOUT LREIT
LREIT is a real estate investment trust, which is listed on the TSX Venture Exchange under the symbols LRT.UN (Trust Units) and LRT.DB.G (Series G Debentures). For further information on LREIT, please visit our website at www.lreit.com.
This press release contains certain statements that could be considered as forward-looking information. The forward-looking information is subject to certain risks and uncertainties, which could result in actual results differing materially from the forward-looking statements.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as the term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Lanesborough Real Estate Investment Trust
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