Canada NewsWire
MISSISSAUGA, ON, Aug. 8, 2018
MISSISSAUGA, ON, Aug. 8, 2018 /CNW/ - Morguard Corporation ("Morguard" or the "Company") (TSX:MRC) today announced its financial results for the three and six months ended June 30, 2018.
Reporting Highlights
Operational and Balance Sheet Highlights:
Acquisitions Completed During the Second Quarter of 2018
The following table presents a summary of the company's acquisitions totalling $104.8 million during the three months ended June 30, 2018.
Property |
Date of Acquisition |
Asset Type |
Location |
Purchase Price (in thousands |
Papilllon Apartments |
April 5, 2018 |
Residential |
New Orleans, LA |
$14,866 |
Santorini Apartments |
June 18, 2018 |
Residential |
Boynton Beach, FL |
64,176 |
Vizcaya Lakes |
June 20, 2018 |
Residential |
Boynton Beach, FL |
25,748 |
$104,790 |
Papillon Apartments is a 116 suites residential property located in the Garden District in New Orleans, Louisiana. The property is within close proximity to The Georgian, the Company's 135 suite mid-rise apartment complex and nearby Tulane and Loyola universities. The property is currently vacant and is designated as a property under development. This acquisition allows the Company to increase its presence in the immediate area and to benefit from management efficiencies between the two properties.
Santorini Apartments is a newly-constructed residential property comprising 226 suites in two 6-storey buildings with a separate 5-storey parking garage that has covered walkways to each building. The buildings are located in Renaissance Commons, the premier mixed-use planned urban development in Boynton Beach, Florida. The property is within 15 minutes of Palm Beach's two major employment centers - downtown West Palm Beach and Boca Raton.
Vizcaya Lakes is a newly-constructed residential property comprising 125 suites within a Class A, 328 suite condominium complex, which consists of two 6-storey buildings located in Boynton Beach, Florida. The property is adjacent to Santorini Apartments.
Financial Highlights
Three months ended June 30 |
Six months ended June 30 | |||
(in thousands of dollars, except per common share) |
2018 |
2017 |
2018 |
2017 |
Revenue from real estate |
$207,061 |
$194,422 |
$410,900 |
$390,940 |
Revenue from hotel properties |
61,997 |
62,142 |
115,849 |
114,397 |
Management and advisory fees |
14,401 |
15,368 |
28,838 |
34,332 |
Interest and other income |
2,880 |
2,570 |
4,320 |
4,530 |
Sales of product and land |
1,386 |
1,198 |
2,636 |
2,440 |
Total revenue |
$287,725 |
$275,700 |
$562,543 |
$546,639 |
Revenue from real estate properties |
$207,061 |
$194,422 |
$410,900 |
$390,940 |
Revenue from hotel properties |
61,997 |
62,142 |
115,849 |
114,397 |
Land rent arbitration settlement |
17,250 |
- |
17,250 |
- |
Property operating expenses |
(81,470) |
(78,208) |
(196,646) |
(183,978) |
Hotel operating expenses |
(44,603) |
(43,619) |
(87,373) |
(85,529) |
Net operating income |
$160,235 |
$134,737 |
$259,980 |
$235,830 |
Net income attributable to common shareholders |
$75,604 |
$151,526 |
$192,212 |
$167,268 |
Net income per common share – basic and diluted |
$6.62 |
$12.72 |
$16.72 |
$14.04 |
Funds from operations |
$73,166 |
$53,527 |
$123,077 |
$101,028 |
FFO per common share – basic and diluted |
$6.39 |
$4.49 |
$10.71 |
$8.48 |
Net Income
Net income for the three months ended June 30, 2018, was $95.9 million compared to net income of $179.6 million in 2017. The decrease in net income of $83.7 million for the three months ended June 30, 2018, was primarily due to the following:
Net Operating Income
NOI increased by $25.5 million, or 18.9%, during the three months ended June 30, 2018, to $160.2 million, compared to $134.7 million generated in 2017, and is further analyzed by asset type below.
Three months ended |
Six months ended June 30 | |||
(in thousands of dollars) |
2018 |
2017 |
2018 |
2017 |
Multi-suite residential |
$51,111 |
$46,505 |
$98,506 |
$90,615 |
Retail |
32,487 |
32,110 |
64,123 |
64,721 |
Office |
31,457 |
29,751 |
62,346 |
61,638 |
Industrial |
2,736 |
1,619 |
5,002 |
3,223 |
Hotels |
17,394 |
18,523 |
28,476 |
28,868 |
Adjusted NOI |
135,185 |
128,508 |
258,453 |
249,065 |
Land rent arbitration settlement |
17,250 |
- |
17,250 |
- |
IFRIC 21 adjustment – multi-suite residential |
6,580 |
4,986 |
(13,093) |
(10,646) |
IFRIC 21 adjustment – retail |
1,220 |
1,243 |
(2,630) |
(2,589) |
NOI |
$160,235 |
$134,737 |
$259,980 |
$235,830 |
NOI for the three months ended June 30, 2018, increased by $17.3 million due to the land rent arbitration settlement which resulted in a reversal of $17.3 million of previously expensed land rent for the period from July 1, 2010 to April 30, 2018.
Adjusted NOI for the three months ended June 30, 2018, increased by $6.7 million to $135.2 million compared to $128.5 million in 2017 primarily due to the following:
Funds From Operations
For the three months ended June 30, 2018, the Company recorded FFO of $73.1 million ($6.39 per common share), compared to $53.4 million ($4.49 per common share) in 2017. The increase in FFO of $19.7 million is mainly due to the following:
The change in foreign exchange rates had a negative impact on FFO of $0.5 million ($0.05 per common share).
Normalized FFO for the three months ended June 30, 2018, was $57.4 million, or $5.01 per common share, versus $52.3 million, or $4.39 per common share, for the same period in 2017, which represents an increase of $5.1 million, or 9.8%. Normalized FFO is computed as FFO adjusted for the impact of non-recurring items net of tax.
Third Quarter Dividend
The Board of Directors of Morguard Corporation announced that the third quarterly, eligible dividend of 2018 in the amount of $0.15 per common share will be paid on September 28, 2018, to shareholders of record at the close of business on September 14, 2018.
The Company's unaudited condensed consolidated financial statements for the three and six months ended June 30, 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 condensed 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 three and six months ended June 30, 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 $21.7 billion. Morguard owns a diversified portfolio of 212 multi-suite residential, retail, office, industrial and hotel properties comprised of 18,480 residential suites, approximately 16.7 million square feet of commercial leasable space and 5,557 hotel rooms. Morguard also currently owns a 56.0% 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
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