Lanesborough REIT Reports 2021 Third Quarter Results
Lanesborough REIT Reports 2021 Third Quarter Results
Canada NewsWire
WINNIPEG, MB, Nov. 25, 2021
WINNIPEG, MB, Nov. 25, 2021 /CNW/ - Lanesborough Real Estate Investment Trust ("LREIT") (TSXV: LRT.UN) today reported its operating results for the quarter ended September 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 – quarterly highlights and the interim financial statements for the quarter ended September 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 September 30 | Nine Months Ended September 30 | |||||||||||||||
Increase (Decrease) in Income | ||||||||||||||||
2021 | 2020 | Amount | % | 2021 | 2020 | |||||||||||
Rentals from investment properties | $ | 5,377,117 | $ | 4,497,114 | $ | 880,003 | 20% | $ | 14,382,769 | $ | 13,297,433 | |||||
Property operating costs | (3,205,468) | (3,015,558) | (189,910) | (6)% | (9,556,479) | (9,082,734) | ||||||||||
Net operating income (NOI) | 2,171,649 | 1,481,556 | 690,093 | 47% | 4,826,290 | 4,214,699 | ||||||||||
Interest income | 43,715 | 45,012 | (1,297) | (3)% | 130,356 | 137,778 | ||||||||||
Interest expense | (3,166,891) | (4,519,349) | 1,352,458 | 30% | (9,178,341) | (13,531,934) | ||||||||||
Trust expense | (288,962) | (295,328) | 6,366 | 2% | (917,822) | (994,506) | ||||||||||
Loss before the following | (1,240,489) | (3,288,109) | 2,047,620 | 62% | (5,139,517) | (10,173,963) | ||||||||||
Fair value adjustments | (546,573) | (19,915,171) | 19,368,598 | 97% | (10,908,331) | (23,747,044) | ||||||||||
Loss before discontinued operations | (1,787,062) | (23,203,280) | 21,416,218 | 92% | (16,047,848) | (33,921,007) | ||||||||||
Loss from discontinued operations | (535,198) | (632,986) | 97,788 | 15% | (1,421,690) | (1,840,033) | ||||||||||
Loss and comprehensive loss | $ | (2,322,260) | $ | (23,836,266) | $ | 21,514,006 | 90% | $ | (17,469,538) | $ | (35,761,040) | |||||
Overall Results
LREIT completed Q3-2021 with a loss and comprehensive loss of $2.3 million, compared to a loss and comprehensive loss of $23.8 million during Q3-2020. The decrease in the extent of the loss and comprehensive loss mainly reflects a $19.4 million decrease in the loss relating to fair value adjustments, a $1.4 million decrease in interest expense and a $0.7 million increase in net operating income ("NOI").
The decrease in the loss relating to fair value adjustments mainly reflects the comparatively high loss from fair value adjustments of $19.9 million recognized during Q3-2020. Losses from fair value adjustments which were recognized during Q3-2020 primarily reflected changes made to key valuation assumptions to incorporate new information, obtained at the time from external appraisals and market reports, with respect to the risks associated with and the outlook for the Fort McMurray rental accommodation market.
The decrease in interest expense during Q3-2021 mainly reflects a $1.0 million decrease in interest on the revolving loan from 2668921 Manitoba Ltd. ("revolving loan"), and a $0.3 million decrease in mortgage loan interest. The decrease in interest on the revolving loan was primarily due to the 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 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 September 30, 2020 to 5.3% as at September 30, 2021.
The increase in NOI mainly reflects a $0.9 million increase in rental revenues, primarily as a result of an increase in the rental revenue of the Fort McMurray properties segment, LREIT's primary operating segment, which increased by $0.8 million or 23%. The increase in the rental revenue of the Fort McMurray properties segment was primarily due to the recognition of insurance proceeds receivable in the amount of $0.6 million during Q3-2021 with respect to rental losses incurred by the Trust as a result of the April 2020 flood in downtown Fort McMurray. Also contributing to the increase in rental revenue of the Fort McMurray properties segment were comparatively low revenues during Q3-2020 due to $0.2 million of vacancy loss recorded during the quarter as a result of the flood.
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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