WINNIPEG, MB, Aug. 26, 2021 /CNW/ – Lanesborough Real Estate Investment Trust (“LREIT”) (TSXV: LRT.UN) today reported its operating results for the quarter ended June 30, 2021. The following comments in regard to the financial position and operating results of LREIT should be read in conjunction with interim management’s discussion & analysis â quarterly highlights and the interim financial statements for the quarter ended June 30, 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 June 30 |
Six Months Ended June 30 |
|||||||||||||||
|
Increase (Decrease) in Income |
||||||||||||||||
|
2021 |
20 20 |
Amount |
% |
2021 |
2020 |
|||||||||||
|
Rentals from investment properties |
$ |
4,730,117 |
$ |
4,469,614 |
$ |
260,503 |
6% |
$ |
9,005,652 |
$ |
8,800,319 |
|||||
|
Property operating costs |
(3,107,421) |
(2,842,135) |
(265,286) |
(9)% |
(6,351,011) |
(6,067,176) |
||||||||||
|
Net operating income (NOI) |
1,622,696 |
1,627,479 |
(4,783) |
– % |
2,654,641 |
2,733,143 |
||||||||||
|
Interest income |
43,462 |
44,300 |
(838) |
(2)% |
86,641 |
92,766 |
||||||||||
|
Interest expense |
(2,817,470) |
(4,548,894) |
1,731,424 |
38% |
(6,011,450) |
(9,012,585) |
||||||||||
|
Trust expense |
(315,375) |
(340,182) |
24,807 |
7% |
(628,860) |
(699,178) |
||||||||||
|
Loss before the following |
(1,466,687) |
(3,217,297) |
1,750,610 |
54% |
(3,899,028) |
(6,885,854) |
||||||||||
|
Fair value adjustments |
(2,721,190) |
(868,611) |
(1,852,579) |
(213)% |
(10,361,758) |
(3,831,873) |
||||||||||
|
Loss before discontinued operations |
(4,187,877) |
(4,085,908) |
(101,969) |
(2)% |
(14,260,786) |
(10,717,727) |
||||||||||
|
Loss from discontinued operations |
(388,154) |
(735,783) |
347,629 |
47% |
(886,492) |
(1,207,047) |
||||||||||
|
Loss and comprehensive loss |
$ |
(4,576,031) |
$ |
(4,821,691) |
$ |
245,660 |
5% |
$ |
(15,147,278) |
$ |
(11,924,774) |
|||||
Overall Results
LREIT completed Q2-2021 with a loss and comprehensive loss of $4.6 million, compared to a loss and comprehensive loss of $4.8 million during Q2-2020. The decrease in the extent of the loss and comprehensive loss mainly reflects a decrease in interest expense and a decrease in the loss from discontinued operations, partially offset by an increase in the loss relating to fair value adjustments.
The decrease in interest expense during Q2-2021 mainly reflects a $1.0 million decrease in interest on the revolving loan from 2668921 Manitoba Ltd. (“revolving loan”), a $0.5 million decrease in amortization of transaction costs and a $0.2 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, effective January 1, 2021, partially offset by an increase in the average outstanding balance of the revolving loan. The decrease in amortization of transaction costs is mainly due to adjustments required to convert the Woodland Park receivership costs, which were initially determined based on estimates, to the actual amounts disclosed to the Court by the Receiver during Q2-2020 and Q2-2021. The decrease in mortgage loan interest was primarily due to the decrease in the weighted average interest rate of the Trust’s mortgage loan debt, which decreased from 5.7% as at June 30, 2020 to 5.3% as at June 30, 2021.
The decrease in the loss from discontinued operations reflects a $0.5 million decrease in property operating costs, mainly due to a decrease in wages, partially offset by a $0.1 million decrease in rental income. The decrease in wages is primarily due to amounts received under the Canada Emergency Wage Subsidy and reduced hours as a result of a restructuring of the staff complement at Chateau St. Michael’s, the seniors’ residence classified as discontinued operations. The decrease in rental income is primarily due to an increase in vacancy driven by the reluctance of many households to move into a seniors’ residence during the COVIDâ19 pandemic.
Losses from fair value adjustments, which were recognized during Q2-2021 in the amount of $2.7 million (Q2-2020 â $0.9 million) mainly reflect a decrease in the carrying value of two properties in the Fort McMurray properties segment as a result of a reduction in the normalized rent potential considered to be achievable for the properties in the Fort McMurray rental market.
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
View original content: http://www.newswire.ca/en/releases/archive/August2021/26/c9871.html