Source: Canadian Net Real Estate Investment Trust.
Fronsac Announces Its Results for the Quarter Ended September 30, 2018, Its 7th Consecutive Annual Distribution Increase and Distributions for the Months of January, February and March 2019
MONTREAL, Nov. 09, 2018 (GLOBE NEWSWIRE) -- (TSX-V: FRO.UN) Fronsac Real Estate Investment Trust (“Fronsac REIT” or “Fronsac”) announces its results for the quarter ended September 30st, 2018 and, for a seventh consecutive year, an increase in its annual distribution as well as distributions for the months of January, February and March 2019.
Distributions
Starting in January 2019, the annual distribution will go from 2.016¢ to 2.220¢ per unit, representing an increase of 10%. The monthly distributions will be of 0.185¢ per unit. This represents a 78% total growth since Fronsac’s first distributions in 2012.
Fronsac also announces that it will make monthly cash distributions of 0.185¢ per unit, representing 2.220¢ per unit on an annualized basis, on January 31st, February 28th and March 29th, 2019 to unitholders of record on January 15th, February 15th and March 15th, 2019, respectively.
For the quarter ended September 30th, 2018, Fronsac reported recurring funds from operations ("Recurring FFO") per unit of 0.95¢ compared to 0.84¢ per unit for the quarter ended September 30th, 2017, an increase of 13%. Recurring FFO was $871,219, an increase of 50% ($581,433 in Q3 2017). During Q3 2018 the Trust’s property rental income was $1,663,373 compared to $1,096,653 in Q3 2017, an increase of 52%. NOI (Net operating Income) was $1,324,647 compared to $882,492 in Q3 2017, an increase of 50%. Fronsac recorded a net income attributable to unitholders of $544,021, or 0.6¢ per unit, compared to a net income of $538,675, or 0.8¢ per unit, in Q3 2017.
For the nine months ended September 30th, 2018, Fronsac reported recurring funds from operations ("Recurring FFO") per unit of 2.75¢ compared to 2.47¢ per unit for the same period in 2017, an increase of 11%. Recurring FFO was $2,413,136, an increase of 52% ($1,589,175 for the same period in 2017). During the period ended September 30, 2018 the Trust’s property rental income was $4,556,093 compared to $3,042,700 for the same period in 2017, an increase of 50%. NOI (Net operating Income) was $3,623,014 compared to $2,466,520 for the same period in 2017, an increase of 47%. Fronsac recorded a net income attributable to unitholders of $2,196,171, or 2.5¢ per unit, compared to net income of $2,701,756, or 4.2¢ per unit, for the same period in 2017.
Jason Parravano President and CEO said: “We are pleased to share with everyone our results for Q3 2018. Our per unit growth has allowed us to increase once again our distributions for the following year, and this for the 7th year in a row. We continued this quarter to diversify our tenant base as well as diversify our geography with our first Nova Scotia acquisition.”
The tables below represent other financial highlights as well as the reconciliation from net income to FFO for the periods ended September 30th, 2018 and its comparative period. This information should be read in conjunction with the Consolidated Financials Statements and MD&A for the quarters ended September 30th, 2018 and September 30th, 2017.
| SUMMARY OF SELECTED ANNUAL INFORMATION | ||||||
| 9 months | ||||||
| Periods ended September 30 | 2018 | 2017 | Δ | % | ||
| Financial info | ||||||
| Property rental income | 4,556,093 | 3,042,700 | 1,513,393 | 50% | ||
| Total revenue | 4,571,093 | 3,052,700 | 1,518,393 | 50% | ||
| NOI (1) | 3,623,014 | 2,466,520 | 1,156,494 | 47% | ||
| FFO (1) | 2,428,136 | 1,599,175 | 828,961 | 52% | ||
| Recurring FFO (1) | 2,413,136 | 1,589,175 | 823,961 | 52% | ||
| AFFO (1) | 2,115,047 | 1,484,966 | 630,081 | 42% | ||
| EBITDA (1) | 3,372,480 | 2,185,929 | 1,186,551 | 54% | ||
| Investment properties (2) | 99,264,996 | 59,266,139 | 39,998,857 | 67% | ||
| Total assets | 96,863,007 | 59,101,842 | 37,761,165 | 64% | ||
| Total mortgage/loans/long term debt (3) | 47,568,403 | 29,731,526 | 17,836,877 | 60% | ||
| Total exchangeable preferred units | - | 977,268 | (977,268) | (100%) | ||
| Total convertible debentures | 1,576,413 | 253,975 | 1,322,438 | 521% | ||
| Total equity | 45,899,465 | 27,864,885 | 18,034,580 | 65% | ||
| Weighted average units o/s - basic | 87,649,966 | 64,372,724 | 23,277,242 | 36% | ||
| Amounts on a per unit basis | ||||||
| FFO | 0.0277 | 0.0248 | 0.0029 | 12% | ||
| Recurring FFO | 0.0275 | 0.0247 | 0.0028 | 11% | ||
| AFFO | 0.0241 | 0.0231 | 0.0011 | 4% | ||
| Distributions | 0.0151 | 0.0135 | 0.0016 | 12% | ||
| (1) Non-IFRS financial measures | ||||||
| (2) Includes value of investment properties owned through joint ventures | ||||||
| (3) Excludes convertible debentures and exchangeable preferred units | ||||||
| RECONCILIATION OF NET INCOME TO FFO | |||||||||||
| 3 months | 9 months | ||||||||||
| Periods ended September 30 | 2018 | 2017 | Δ | 2018 | 2017 | Δ | |||||
| Net income attributable to unitholders | 544,021 | 538,675 | 5,346 | 2,196,171 | 2,701,756 | (505,585) | |||||
| Debenture issuance costs | 53,171 | - | 53,171 | 53,171 | - | 53,171 | |||||
| Δ in value of investment properties | 24,924 | 37,050 | (12,126) | (145,781) | (1,386,873) | 1,241,092 | |||||
| Δ in value of investment properties in joint ventures | 124,712 | - | 124,712 | 156,423 | (141,641) | 298,064 | |||||
| Unit based compensation | 17,600 | (200) | 17,800 | 80,510 | 67,825 | 12,685 | |||||
| Δ in liability component of exch. preferred units & debentures | 10,130 | 14,838 | (4,708) | 10,882 | 36,264 | (25,382) | |||||
| Δ in fair value of derivative financial instruments | 94,260 | (8,930) | 103,190 | 71,720 | 321,844 | (250,124) | |||||
| Income taxes | 2,401 | - | 2,401 | 5,040 | - | 5,040 | |||||
| FFO(1) - basic | 871,219 | 581,433 | 50% | 2,428,136 | 1,599,175 | 52% | |||||
| FFO per unit - basic | 0.0095 | 0.0084 | 13% | 0.0277 | 0.0248 | 12% | |||||
| Distributions paid on exchangeable preferred units and convertible debentures (if dilutive) | - | 13,896 | (13,896) | - | 41,690 | (41,690) | |||||
| FFO - diluted | 871,219 | 595,329 | 46% | 2,428,136 | 1,640,865 | 48% | |||||
| FFO per unit - diluted | 0.0093 | 0.0081 | 15% | 0.0269 | 0.0241 | 12% | |||||
| Recurring FFO - basic | 871,219 | 581,433 | 50% | 2,413,136 | 1,589,175 | 52% | |||||
| Recurring FFO per unit - basic | 0.0095 | 0.0084 | 13% | 0.0275 | 0.0247 | 11% | |||||
| Distributions | 458,528 | 312,765 | 145,763 | 1,322,097 | 892,377 | 429,720 | |||||
| Distributions per unit | 0.0050 | 0.0045 | 11% | 0.0151 | 0.0135 | 12% | |||||
| FFO - basic after distributions | 0.0045 | 0.0039 | 0.0006 | 0.0126 | 0.0113 | 0.0012 | |||||
| Recurring FFO - basic after distributions | 0.0045 | 0.0039 | 0.0006 | 0.0124 | 0.0112 | 0.0012 | |||||
| Distributions as a % of | |||||||||||
| FFO - basic | 53% | 54% | (1%) | 55% | 54% | 1% | |||||
| Distributions as a % of | |||||||||||
| Recurring FFO - basic | 53% | 54% | (1%) | 55% | 55% | 0% | |||||
| Weighted avg. units o/s | |||||||||||
| Basic | 91,554,473 | 69,503,343 | 22,051,130 | 87,649,966 | 64,372,724 | 23,277,242 | |||||
| Diluted | 94,059,156 | 73,172,938 | 20,886,218 | 90,154,649 | 68,042,319 | 22,112,330 | |||||
| (1) FFO is a Non-IFRS financial measure | |||||||||||
About Fronsac - Fronsac Real Estate Investment Trust is an open-ended trust that acquires and owns high quality triple net and management-free commercial real estate properties.
Forward-Looking Statements - This press release contains forward-looking statements and information as defined by applicable securities laws. Fronsac warns the reader that actual events may differ materially from current expectations due to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated in such statements. Among these include the risks related to economic conditions, the risks associated with the local real estate market, the dependence to the financial condition of tenants, the uncertainties related to real estate activities, the changes in interest rates, the availability of financing in the form of debt or equity, the effects related to the adoption of new IFRS standards, as well as other risks and factors described from time to time in the documents filed by Fronsac with securities regulators, including the management report. Fronsac does not update or modify its forward-looking statements even if future events occur or for any other reason, unless required by law or any regulatory authority.
Neither the TSX Venture Exchange Inc., nor its Regulatory Services Provider (as that term is defined in the Policy of the TSX Venture Exchange and its Regulatory Services Provide) accepts any responsibility for the adequacy or accuracy of this release.
The September 30th, 2018 financial statements and management discussion & analysis of Fronsac REIT may be viewed on SEDAR at www.sedar.com
For further information please contact Jason Parravano at (450) 536-5328.