Canada NewsWire
QUÉBEC CITY, March 7, 2019
QUÉBEC CITY, March 7, 2019 /CNW Telbec/ - Cominar Real Estate Investment Trust ("Cominar" or the "REIT") (TSX: CUF.UN) is pleased to announce its results for the fourth quarter and fiscal year ended December 31, 2018.
"During 2018 we completed several important initiatives resulting in a return to organic growth, strengthening our balance sheet, the reduction of our distribution to enhance financial flexibility and, key executive hires," said Sylvain Cossette, President and Chief Executive Officer of Cominar. "We believe that we have a strong foundation from which to build on these accomplishments to create value for unitholders. With a refreshed and enthusiastic management team in place, we are pleased with our progress and look forward to sharing our vision, strategic priorities and action plan at our upcoming annual meeting of unitholders."
FINANCIAL AND OPERATING HIGHLIGHTS
(1) | Non-IFRS financial measure. See the reconciliation to closest IFRS measure. |
BALANCE SHEET AND LIQUIDITY HIGHLIGHTS
"We are entering a very active period for refinancing and are pleased with the progress we are making on our mortgage financing program and the refinancing of our credit line," stated Heather C. Kirk, Executive Vice President and Chief Financial Officer. "Our goals remain, de-risking the balance sheet, delivering stronger organic growth and selective non-core dispositions in order to drive NAV per unit growth. And, we are excited about the prospects for accelerating progress towards these goals in 2019."
INVESTMENT HIGHLIGHTS
NEW APPOINTMENTS TO THE BOARD AND MANAGEMENT TEAM
Cominar continues to deepen its management team and refresh its board. On March 8, 2018, two new members, Paul D. Campbell and René Tremblay, joined the Board of Trustees. On May 16, 2018, Heather C. Kirk was elected as a Trustee at the annual meeting of Unitholders. On January 2nd, 2019, Zachary Ryan George joined the board. Additionally, Mitchell Cohen will be included on the list of nominees for the election of Cominar Trustees to fill the vacancy created by the departure of Alban D'Amours in May 2019.
On November 5, 2018, Cominar announced that Heather C. Kirk was stepping down as a member of the board of trustees to take on the role of Executive Vice President and Chief Financial Officer, role Mrs Kirk took on December 3, 2018. During the third quarter, Cominar also announced the appointment of Marie-Andrée Boutin as Executive Vice President, Strategy and Operations, Retail.
NON-IFRS FINANCIAL MEASURES
Net operating income, funds from operations (FFO), adjusted funds from operations (AFFO) and adjusted net income are not measures recognized by International Financial Reporting Standards ("IFRS") and do not have standardized meanings prescribed by IFRS. Such measures may differ from similar computations as reported by similar entities and, accordingly, may not be comparable to similar measures reported by such other entities.
RESULTS OF OPERATIONS
Quarter | Year | ||||||
For the periods ended December 31 |
2018(1) | 2017 |
2018(1) | 2017 | |||
($000) | ($000) | ($000) | ($000) | ||||
Operating revenues | 176,073 | 207,418 | 734,650 | 835,489 | |||
Operating expenses | (84,945) | (96,931) | (362,186) | (399,452) | |||
Net operating income(2) | 91,128 | 110,487 | 372,464 | 436,037 | |||
Finance charges | (36,393) | (42,839) | (152,237) | (168,752) | |||
Trust administrative expenses | (6,106) | (11,408) | (23,255) | (25,977) | |||
Change in fair value of investment properties | (276,160) | (616,354) | (267,098) | (616,354) | |||
Share of joint ventures' net income | 1,083 | 108 | 5,176 | 5,276 | |||
Transaction costs | (2,866) | — | (22,847) | — | |||
Impairment of goodwill | (120,389) | — | (120,389) | — | |||
Derecognition of goodwill | (3,278) | (26,989) | (3,872) | (26,989) | |||
Loss before income taxes | (352,981) | (586,995) | (212,058) | (396,759) | |||
Income taxes | |||||||
Current | (372) | — | (6,763) | — | |||
Deferred | — | 5,739 | 6,539 | 5,034 | |||
(372) | 5,739 | (224) | 5,034 | ||||
Net loss | (353,353) | (581,256) | (212,282) | (391,725) |
(1) | Results for periods ended December 31, 2018 have been affected by the sale of 95 non-core properties during the first quarter of 2018. |
(2) | Non-IFRS financial measure. See the reconciliation to closest IFRS measure. |
SAME PROPERTY NET OPERATING INCOME(1)
Quarter | Year | ||||||
For the periods ended December 31 | 2018(1) | 2017 | 2018(1) | 2017 | |||
($000) | ($000) | % Δ | ($000) | ($000) | % Δ | ||
Net operating income – Financial statements | 91,128 | 110,487 | 372,464 | 436,037 | |||
Joint-ventures | 2,398 | 2,167 | 9,493 | 7,549 | |||
Net operating income – Cominar's proportionate share(2) | 93,526 | 112,654 | 381,957 | 443,586 | |||
Breakdown | |||||||
Same property portfolio | |||||||
Office | 36,767 | 35,331 | 4.1 | 143,868 | 138,990 | 3.5 | |
Retail | 33,728 | 34,471 | (2.2) | 134,773 | 139,587 | (3.4) | |
Industrial and flex | 22,616 | 22,339 | 1.2 | 87,926 | 84,526 | 4.0 | |
Same property portfolio | 93,111 | 92,141 | 1.1 | 366,567 | 363,103 | 1.0 | |
Other | 415 | 20,513 | 15,390 | 80,483 | |||
Net operating income – Cominar's proportionate share(2) | 93,526 | 112,654 | 381,957 | 443,586 |
(1) | Results for periods ended December 31, 2018 have been affected by the sale of 95 non-core properties during the first quarter of 2018. |
(2) | Non-IFRS financial measure. See the reconciliation to closest IFRS measure. |
FUNDS FROM OPERATIONS (FFO) AND ADJUSTED FUNDS FROM OPERATIONS (AFFO)
The following table presents a reconciliation of net loss, as determined in accordance with IFRS, and recurring funds from operations and recurring adjusted funds from operations:
Quarter | Year | ||||
For the periods ended December 31 |
2018(1) | 2017 |
2018(1) | 2017 | |
($000) | ($000) | ($000) | ($000) | ||
Net loss | (353,353) | (581,256) | (212,282) | (391,725) | |
Taxes on disposition of properties | 372 | — | 6,763 | — | |
Deferred income taxes | — | (5,739) | (6,539) | (5,034) | |
Initial and re-leasing salary costs | 713 | 882 | 3,348 | 3,532 | |
Change in fair value of investment properties(2) | 276,459 | 617,418 | 267,397 | 615,134 | |
Capitalizable interest on properties under development – joint ventures | 159 | 198 | 621 | 793 | |
Transaction costs | 2,866 | — | 22,847 | — | |
Impairment of goodwill | 120,389 | — | 120,389 | — | |
Derecognition of goodwill | 3,278 | 26,989 | 3,872 | 26,989 | |
Funds from operations(2)(3) | 50,883 | 58,492 | 206,416 | 249,689 | |
Governance and strategic alternative consulting fees | 310 | — | 3,839 | — | |
Severance allowance | 735 | 5,400 | 735 | 5,400 | |
Recurring funds from operations (2)(3) | 51,928 | 63,892 | 210,990 | 255,089 | |
Provision for leasing costs | (7,613) | (6,583) | (29,225) | (25,820) | |
Recognition of leases on a straight-line basis(2) | (1,020) | (1,554) | (2,036) | (4,027) | |
Capital expenditures – maintenance of rental income generating capacity | (3,203) | (4,127) | (15,004) | (9,415) | |
Recurring adjusted funds from operations(2)(3) | 40,092 | 51,628 | 164,725 | 215,827 | |
Payout ratio of recurring adjusted funds from operations(3)(4) | 81.8% | 101.8% | 87.8% | 113.9% |
(1) | FFO and AFFO for periods ended December 31, 2018 have been affected by the sale of 95 non-core properties to Slate during the first quarter of 2018. |
(2) | Including Cominar's proportionate share in joint ventures. |
(3) | Non-IFRS financial measure. |
(4) | Fully diluted. |
OCCUPANCY RATES
Montreal | Québec City | Ottawa | Total | ||||||||
Committed | In-place | Committed | In-place | Committed | In-place | Committed | In-place | ||||
Operating segment | |||||||||||
Office | 89.0% | 84.6% | 97.1% | 93.2% | 92.4% | 83.9% | 91.5% | 86.5% | |||
Retail | 95.0% | 87.1% | 92.7% | 86.0% | 84.0% | 55.4% | 93.8% | 85.5% | |||
Industrial and flex | 94.7% | 93.6% | 96.1% | 93.8% | N/A | N/A | 95.0% | 93.7% | |||
Total | 93.1% | 89.5% | 95.1% | 90.5% | 91.5% | 79.5% | 93.6% | 89.2% | |||
ADDITIONAL FINANCIAL INFORMATION
Cominar's consolidated financial statements and management's discussion and analysis for fiscal 2018 are filed with SEDAR at sedar.com and are available on Cominar's website at cominar.com.
CONFERENCE CALL ON March 7, 2019
On Thursday, March 7, 2019 at 11 a.m. (ET), Cominar's management will hold a conference call to present the results for fiscal 2018. In order to participate please dial 1 888 390-0546. A presentation will be available before the conference call on the REIT's website at cominar.com, under the Conference Call header. In addition, a replay of the conference call will be available from Thursday, March 7, 2019 at 2 p.m. to Thursday, March 14, 2019 at 11:59 p.m., by dialing 1 888 390-0541 and entering passcode: 957382#.
PROFILE AS AT MARCH 7, 2019
Cominar is one of the largest diversified real estate investment trust in Canada and is the largest commercial property owner in the Province of Québec. The REIT owns a real estate portfolio of 415 properties in three different market segments, that is, office properties, retail properties and industrial and flex properties. Cominar's portfolio totals 37.5 million square feet located in the Montreal, Québec City and Ottawa areas. Cominar's primary objectives are to maximize unit value through the proactive management of its properties.
FORWARD-LOOKING STATEMENTS
This press release may contain forward-looking statements with respect to Cominar and its operations, strategy, financial performance and financial position. These statements generally can be identified by the use of forward-looking words such as "may", "will", "expect", "estimate", "anticipate", "intend", "believe" or "continue" or the negative thereof or similar variations and the use of conditional and future tenses. The actual results and performance of Cominar discussed herein could differ materially from those expressed or implied by such statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Some important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, changes in government regulation and the factors described under "Risk Factors" in Cominar's Annual Information Form. The cautionary statements qualify all forward-looking statements attributable to Cominar and persons acting on its behalf. Unless otherwise stated, all forward-looking statements speak only as of the date of this press release. Cominar does not assume any obligation to update the aforementioned forward-looking statements, except as required by applicable laws.
SOURCE COMINAR REAL ESTATE INVESTMENT TRUST
View original content: http://www.newswire.ca/en/releases/archive/March2019/07/c7192.html
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