Canada NewsWire
MISSISSAUGA, ON, July 30, 2019
MISSISSAUGA, ON, July 30, 2019 /CNW/ - Morguard North American Residential REIT (the "REIT") (TSX: MRG.UN) today announced its financial results for the three and six months ended June 30, 2019.
Highlights
The REIT is reporting second quarter performance of:
The REIT is reporting the following corporate and portfolio highlights:
Financial and Operational Highlights
As at | June 30, | December 31, | June 30, |
(In thousands of dollars, except as noted otherwise) | 2019 | 2018 | 2018 |
Operational Information | |||
Number of properties | 42 | 47 | 47 |
Total suites | 12,587 | 13,430 | 13,430 |
Occupancy percentage – Canada | 98.8% | 99.1% | 99.2% |
Occupancy percentage – U.S. | 95.2% | 94.7% | 93.7% |
Average monthly rent - Canada (in actual dollars) | $1,399 | $1,373 | $1,345 |
Average monthly rent - U.S. (in actual U.S. dollars) | US$1,319 | US$1,236 | US$1,221 |
Summary of Financial Information | |||
Gross book value | $2,952,777 | $3,011,469 | $2,857,537 |
Indebtedness | $1,360,870 | $1,442,607 | $1,413,008 |
Indebtedness to gross book value ratio | 46.1% | 47.9% | 49.4% |
Weighted average mortgage interest rate | 3.48% | 3.49% | 3.48% |
Weighted average term to maturity on mortgages payable (years) | 5.3 | 5.8 | 6.3 |
Exchange rates - United States dollar to Canadian dollar | $1.31 | $1.36 | $1.32 |
Exchange rates - Canadian dollar to United States dollar | $0.76 | $0.73 | $0.76 |
Three months ended | Six months ended | |||
June 30 | June 30 | |||
(In thousands of dollars, except per Unit amounts) | 2019 | 2018 | 2019 | 2018 |
Summary of Financial Information | ||||
Interest coverage ratio | 2.28 | 2.24 | 2.27 | 2.20 |
Indebtedness coverage ratio | 1.60 | 1.61 | 1.59 | 1.58 |
Revenue from real estate properties | $60,960 | $59,973 | $123,218 | $118,067 |
NOI | $38,989 | $38,323 | $55,826 | $55,433 |
Proportionate NOI | $31,929 | $31,962 | $63,849 | $62,147 |
Same Property Proportionate NOI | $31,808 | $30,879 | $62,975 | $59,934 |
NOI margin - IFRS | 64.0% | 63.9% | 45.3% | 47.0% |
NOI margin - Proportionate | 54.4% | 55.5% | 53.8% | 54.6% |
Net income | $41,912 | $19,687 | $45,638 | $100,093 |
FFO - basic | $15,697 | $15,687 | $30,943 | $30,436 |
FFO - diluted | $16,656 | $16,646 | $32,856 | $32,308 |
FFO per Unit - basic | $0.31 | $0.31 | $0.61 | $0.60 |
FFO per Unit - diluted | $0.31 | $0.30 | $0.60 | $0.58 |
Distributions per Unit | $0.17 | $0.165 | $0.34 | $0.33 |
FFO payout ratio | 55.1% | 53.6% | 55.9% | 55.2% |
Weighted average number of Units outstanding (in thousands): | ||||
Basic | 50,958 | 50,926 | 50,954 | 50,922 |
Diluted | 55,191 | 55,159 | 55,187 | 55,324 |
Average exchange rates - United States dollar to Canadian dollar | $1.34 | $1.29 | $1.33 | $1.28 |
Average exchange rates - Canadian dollar to United States dollar | $0.75 | $0.77 | $0.75 | $0.78 |
Net Income
Net income of $41.9 million for the three months ended June 30, 2019, increased by $22.2 million compared to $19.7 million in 2018. The increase in net income was primarily due to the following:
Net Operating Income
Three months ended June 30, 2019
For the three months ended June 30, 2019, NOI from the REIT's properties increased by $0.7 million (or 1.7%) to $39.0 million, compared to $38.3 million in 2018. The increase in NOI is due to an increase in Same Property NOI of $1.8 million (or 4.9%) and a decrease of $1.2 million from the disposition of properties net of the acquisition of partial interests in three properties controlled by the REIT. The Same Property increase of $1.8 million is due to an increase in Canada of $0.2 million (or 1.7%), an increase in the U.S. of US$0.6 million (or 3.0%) and the change in foreign exchange rate which increased NOI by $1.0 million.
For the three months ended June 30, 2019, Proportionate NOI from the REIT's properties decreased by $0.1 million (or 0.1%) to $31.9 million, compared to $32.0 million in 2018. The decrease in Proportionate NOI is due to a decrease of $1.0 million from the disposition of properties net of the acquisition of partial interests in three properties controlled by the REIT and an increase in Same Property Proportionate NOI of $0.9 million (or 3.0%). The Same Property increase of $0.9 million is due to an increase in Canada of $0.2 million (or 1.6%), an increase in the U.S. of US$0.1 million (or 0.4%) and the change in foreign exchange rate which increased Proportionate NOI by $0.6 million.
Six months ended June 30, 2019
For the six months ended June 30, 2019, NOI from the REIT's properties increased by $0.4 million (or 0.7%) to $55.8 million, compared to $55.4 million in 2018. The increase in NOI is due to an increase in Same Property NOI of $2.0 million (or 3.7%) and a decrease of $1.6 million from the disposition of properties net of the acquisition of partial interests in three properties controlled by the REIT. The Same Property increase of $2.0 million is due to an increase in Canada of $0.9 million (or 3.7%), a decrease in the U.S. of US$0.2 million (or 1.1%) and the change in foreign exchange rate which increased NOI by $1.3 million.
For the six months ended June 30, 2019, Proportionate NOI from the REIT's properties increased by $1.7 million (or 2.7%) to $63.8 million, compared to $62.1 million in 2018. The increase in Proportionate NOI is due to an increase in Same Property Proportionate NOI of $3.0 million (or 5.1%) and a decrease of $1.3 million from the disposition of properties net of the acquisition of partial interests in three properties controlled by the REIT. The Same Property increase of $3.0 million is due to an increase in Canada of $0.9 million (or 3.7%), an increase in the U.S. of US$0.5 million (or 1.7%) and the change in foreign exchange rate which increased Proportionate NOI by $1.6 million.
Funds From Operations
Three months ended June 30, 2019
Basic FFO for the three months ended June 30, 2019 was $15.7 million ($0.31 per Unit), compared to $15.7 million ($0.31 per Unit) in 2018. An increase in other income of $0.1 million was offset by $0.1 million due to lower Proportionate NOI and increase in interest expense (excluding distributions on Class B LP Units and fair value adjustments on the conversion option on the convertible debentures). The increase in interest expense includes lower amortization of mark-to-market adjustments of $0.2 million and a $0.1 million loss on extinguishment of mortgage payable in connection with the disposal of five Louisiana properties.
Basic FFO per Unit for the three months ended June 30, 2019, was $0.31 per Unit, compared to $0.31 per Unit for the three months ended June 30, 2018. The change in the foreign exchange rate had a $0.01 per Unit positive impact and the disposal of the five Louisiana properties had a $0.01 per Unit negative impact.
Six months ended June 30, 2019
Basic FFO for the six months ended June 30, 2019, increased by $0.5 million, or 1.7%, to $30.9 million ($0.61 per Unit), compared to $30.4 million ($0.60 per Unit) in 2018. The increase is mainly due to higher Proportionate NOI of $1.7 million and an increase in other income of $0.1 million, partially offset by an increase in interest expense of $0.9 million (excluding distributions on Class B LP Units and fair value adjustments on the conversion option on the convertible debentures) and an increase in trust expenses of $0.3 million. The increase in interest expense of $0.9 million includes lower amortization of mark-to-market adjustments of $0.4 million and a $0.6 million loss on extinguishment of mortgage payable in connection with the disposal of five Louisiana properties.
Basic FFO per Unit for the six months ended June 30, 2019, increased by $0.01 to $0.61 per Unit, compared to $0.60 per Unit for the six months ended June 30, 2018. The change in the foreign exchange rate had a $0.02 per Unit positive impact and the disposal of the five Louisiana properties had a $0.02 per Unit negative impact.
The REIT's unaudited condensed consolidated financial statements for the three and six months ended June 30, 2019, along with the Management's Discussion and Analysis will be available on the REIT's website at www.morguard.com and will be filed with SEDAR at www.sedar.com.
Non-IFRS Measures
The REIT's condensed consolidated financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS"). The following measures, NOI, Proportionate NOI, Same Property NOI, Same Property Proportionate NOI, FFO, indebtedness, gross book value, indebtedness to gross book value ratio, interest coverage ratio, indebtedness coverage ratio and Proportionate Basis (collectively, the "non-IFRS measures") as well as other measures discussed elsewhere in this press release, do not have a standardized definition prescribed by IFRS and are, therefore, unlikely to be comparable to similar measures presented by other reporting issuers. The REIT uses these measures to better assess the REIT'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 REIT's Management's Discussion and Analysis for the three and six months ended June 30, 2019 and available on the REIT's profile on SEDAR at www.sedar.com.
Conference Call Details
Morguard North American Residential Real Estate Investment Trust will hold a conference call on Thursday, August 1, 2019 at 3:00 p.m. (ET) to discuss the financial results for the six months ended June 30, 2019 and 2018. To participate in the conference call, please dial 416-764-8688 or 1-888-390-0546. Please quote conference ID # 98673063.
About Morguard North American Residential REIT
The REIT is an unincorporated, open-ended real estate investment trust established under and governed by the laws of the Province of Ontario. The Units of the REIT trade on the Toronto Stock Exchange under the ticker symbol MRG.UN. With a strategic focus on the acquisition of high-quality multi-suite residential properties in Canada and the United States, the REIT maximizes long-term Unit value through active asset and property management. The REIT's portfolio consists of 12,587 residential suites (as of July 30, 2019) located in Alberta, Ontario, Colorado, Texas, Louisiana, Illinois, Georgia, Florida, North Carolina, Virginia and Maryland with an appraised value of approximately $2.9 billion at June 30, 2019. For more information, visit the REIT's website at www.morguard.com.
SOURCE Morguard North American Residential Real Estate Investment Trust
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