Canada NewsWire
MISSISSAUGA, ON, Feb. 21, 2019
MISSISSAUGA, ON, Feb. 21, 2019 /CNW/ - Morguard Corporation ("Morguard" or the "Company") (TSX:MRC) today announced its financial results for the year ended December 31, 2018.
Reporting Highlights
Operational and Balance Sheet Highlights:
Acquisitions Completed During 2018
The following table presents a summary of the Company's acquisitions totalling $355.5 million during the year ended December 31, 2018.
Property | Ownership | Asset | Location | Apartment | Commercial | Purchase | |
1100 and 1101 Polytek St. | 100% | Industrial | Ottawa, ON | — | 243,000 | $43,422 | |
5985 Explorer Drive | 100% | Office | Mississauga, ON | — | 128,000 | 51,711 | |
1643 Josephine | 100% | Residential | New Orleans, LA | 116 | — | 14,866 | |
Santorini Apartments | 100% | Residential | Boynton Beach, FL | 226 | — | 64,176 | |
Vizcaya Lakes | 100% | Residential | Boynton Beach, FL | 126 | — | 25,892 | |
41 Rue Victoria (1) | 100% | Office | Gatineau, QC | — | 134,000 | 60,615 | |
Jean Edmonds Towers | 49.9% | Office | Ottawa, ON | — | 552,000 | 94,854 | |
468 | 1,057,000 | $355,536 |
(1)The Company assumed mortgage payable of $32,264 in connection with the acquisition of the property. |
Financial Highlights
For the years ended December 31 | ||
(in thousands of dollars, except per common share) | 2018 | 2017 |
Revenue from real estate | $841,497 | $790,535 |
Revenue from hotel properties | 237,938 | 237,116 |
Management and advisory fees | 62,096 | 71,786 |
Interest and other income | 10,947 | 8,907 |
Sales of product and land | 5,400 | 5,430 |
Total revenue | $1,157,878 | $1,113,774 |
Revenue from real estate properties | $841,497 | $790,535 |
Revenue from hotel properties | 237,938 | 237,116 |
Land rent arbitration settlement | 17,250 | - |
Property operating expenses | (368,222) | (338,070) |
Hotel operating expenses | (180,488) | (175,714) |
Net operating income | $547,975 | $513,867 |
Net income attributable to common shareholders | $319,851 | $310,120 |
Net income per common share – basic and diluted | $27.96 | $26.10 |
Funds from operations | $232,396 | $225,072 |
FFO per common share – basic and diluted | $20.32 | $18.94 |
Normalized funds from operations | $214,824 | $222,442 |
Normalized FFO per common share – basic and diluted | $18.78 | $18.72 |
Net Income
Net income for the year ended December 31, 2018, was $344.1 million compared to net income of $344.4 million in 2017. The decrease in net income of $0.3 million for the year ended December 31, 2018, was primarily due to the following:
Net Operating Income
NOI increased by $34.1 million, or 6.6%, during the year ended December 31, 2018, to $548.0 million, compared to $513.9 million generated in 2017, and is further analyzed by asset type below.
For the years ended December 31 | |||||
(in thousands of dollars) | 2018 | 2017 | |||
Multi-suite residential | $201,160 | $184,548 | |||
Retail | 132,743 | 137,021 | |||
Office | 129,454 | 123,176 | |||
Industrial | 9,394 | 6,292 | |||
Hotels | 57,450 | 61,402 | |||
Adjusted NOI | 530,201 | 512,439 | |||
Land rent arbitration settlement | 17,250 | - | |||
IFRIC 21 adjustment – multi-suite residential | 498 | 1,428 | |||
IFRIC 21 adjustment – retail | 26 | - | |||
NOI | $547,975 | $513,867 | |||
The increase in NOI of $34.1 million is due to the land rent arbitration settlement of $17.2 million, a decrease in the IFRIC 21 adjustment of $0.9 million and the change in Adjusted NOI described below.
Adjusted NOI for the year ended December 31, 2018, increased by $17.8 million to $530.2 million compared to $512.4 million in 2017 primarily due to the following:
Funds From Operations
For the year ended December 31, 2018, the Company recorded FFO of $232.4 million ($20.32 per common share), compared to $225.1 million ($18.94 per common share) in 2017. The increase in FFO of $7.3 million is mainly due to the following:
The change in foreign exchange rates had a positive impact on FFO of $0.1 million ($0.01 per common share).
Normalized FFO for the year ended December 31, 2018, was $214.8 million, or $18.78 per common share, versus $222.4 million, or $18.72 per common share, for the same period in 2017, which represents a decrease of
$7.6 million or 3.4%. Normalized FFO is computed as FFO adjusted for the impact of non-recurring items net of tax.
Financing Activity
The following summarizes the Company's financing activities during the year ended December 31, 2018:
Subsequent Events
On January 25, 2019, the Company issued $225.0 million of 4.715% Series E senior unsecured debentures due on January 25, 2024. Interest on the Series E unsecured debentures is payable semi-annually, not in advance, on January 25 and July 25 of each year commencing on July 25, 2019. Paros, a related party, purchased $12.5 million aggregate principal amount of the Series E unsecured debentures.
Subsequent to December 31, 2018, the Company repaid $199.0 million under its operating lines of credit.
Subsequent to December 31, 2018, the Company acquired 3,300, common shares under its NCIB for cash consideration of $0.6 million.
On February 1, 2019, the Company sold a property located in Shreveport, Louisiana, comprising 194 suites, for gross proceeds of $13.8 million (US$10,5 million) and the purchaser assumed the mortgage secured by the property in the amount of $7.0 million (US$5.3 million).
First Quarter Dividend
The Board of Directors of Morguard Corporation announced that the first quarterly, eligible dividend of 2019 in the amount of $0.15 per common share will be paid on March 29, 2019, to shareholders of record at the close of business on March 15, 2019.
The Company's audited financial statements for the year ended December 31, 2018, along with Management's Discussion and Analysis will be available on the Company's website at www.morguard.com and will be filed with SEDAR at www.sedar.com.
Non-IFRS Measures
The Company's consolidated financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS"). The following measures, NOI, Adjusted NOI, Comparative NOI, FFO and Normalized FFO (collectively, the "non-IFRS measures") as well as other measures discussed elsewhere in this press release, do not have a standardized meaning prescribed by IFRS and are, therefore, unlikely to be comparable to similar measures presented by other reporting issuers in similar or different industries. The Company uses these measures to better assess the Company's underlying performance and financial position and provides these additional measures so that investors may do the same. Details on non-IFRS measures are set out in the Company's Management's Discussion and Analysis for the year ended December 31, 2018 and available on the Company's profile on SEDAR at www.sedar.com.
About Morguard Corporation
Morguard Corporation is a real estate company, with total assets owned and under management valued at $21.0 billion. Morguard owns a diversified portfolio of 214 multi-suite residential, retail, office, industrial and hotel properties comprised of 18,481 residential suites, approximately 17.2 million square feet of commercial leasable space and 5,903 hotel rooms. Morguard also currently owns a 57.6% interest in Morguard Real Estate Investment Trust ("Morguard REIT" or "MRT"), a 46.9% effective interest in Morguard North American Residential Real Estate Investment Trust ("Morguard Residential REIT" or "MRG") and a 58.7% effective interest in Temple Hotels Inc. ("Temple"). Morguard also provides advisory and management services to institutional and other investors. For more information, visit the Company's website at www.morguard.com.
SOURCE Morguard Corporation
View original content: http://www.newswire.ca/en/releases/archive/February2019/21/c4587.html
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