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Press release from Marketwire

Retrocom Mid-Market REIT Announces First Quarter 2010 Financial Results and May 2010 Monthly Distribution

Friday, May 14, 2010

Retrocom Mid-Market REIT Announces First Quarter 2010 Financial Results and May 2010 Monthly Distribution16:02 EDT Friday, May 14, 2010TORONTO, ONTARIO--(Marketwire - May 14, 2010) - NOT FOR DISSEMINATION IN THE UNITED STATES OR TO ANY NON-CANADIAN SOURCERetrocom Mid-Market Real Estate Investment Trust (the "REIT") (TSX:RMM.UN) announced today its financial results for the first quarter ended March 31, 2010.Highlights -- Net Operating Income ("NOI") for the first quarter ended March 31, 2010 was $7.8 million, compared to $7.7 million for the same quarter in 2009. The $0.1 million increase is primarily due to a stable portfolio as compared to 2009 which was impacted by tenant failures. -- Funds from Operations ("FFO") for the quarter was $3.2 million ($0.12 per unit, adjusted for non-controlling interest), compared to $3.5 million ($0.13 per unit, adjusted for non-controlling interest) for the same quarter in 2009. This $0.3 million decrease in FFO is primarily due to increased interest expense of $0.3 million due to higher mortgage amounts and increased trust expense of $0.1 million stemming from costs associated with the IFRS conversion project and the SIFT legislation, offset by lower non-recoverable expenses in the properties of $0.1 million. -- The portfolio was stable at 90.0% occupancy at the end of the first quarter of 2010, as compared to 89.9% at the year-end 2009. -- The REIT's average cost of mortgage debt at the end of the first quarter is 6.19% with a conservative leverage ratio of 55.0% inclusive of all debentures and mortgages, as compared to 70% allowed under the REIT's Trust Indenture. As of March 31, 2010, the REIT had cash on hand of approximately $13.2 million and close to $10 million available under the operating line. In addition, the REIT will be moving its offices to the SmartCentres building in Vaughan, Ontario. The move will take effect prior to the end of the third quarter of this year. The REIT anticipates this move will enhance operating synergies with its servicing partner, SmartCentres.David Fiume, President and CEO of the REIT, said, "Although results this quarter are flat, we see a number of positive signs of a recovery in retailing and in the leasing market and remain cautiously optimistic that this activity will begin to take hold at our centres. We have a strong liquidity position, to take advantage of leasing, revitalization and development activities as they present themselves. Although the timing of increased activity is difficult to predict, we believe we are in a good position to capitalize on growth through lease up, and later, through future redevelopment opportunities in our existing portfolio. We believe that with the synergies that are created by relocating to the SmartCentres building, we will be better prepared to execute on our leasing and development objectives."DistributionThe REIT announced today that the cash distribution for the month of May 2010 will be $0.0375 per unit, or $0.45 per unit on an annual basis and will be payable on June 15, 2010 to Unitholders of record as of May 31, 2010. Distributions paid to Unitholders who are non-residents of Canada will be subject to Canadian withholding tax.CFO DepartureThe REIT also announced that Sandy Ardern, the Chief Financial Officer, will be leaving the REIT to pursue another opportunity effective June 4, 2010."It has been a pleasure working with Sandy and she has done a tremendous job while at the REIT. The Board and I would like to thank Sandy for her contributions and wish her well in her future endeavours. We have initiated a search to find a suitable replacement for Sandy," said David Fiume. Financial Highlights ---------------------------------------------------------------------------- Three months Three months ended Mar 31 ended Mar 31 ---------------------------------------------------------------------------- (all amounts in $000's , except per unit amounts and ratios) 2010 (1) 2009 (1) ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Rental revenue and other income 14,987 15,449 ---------------------------------------------------------------------------- Property operating expenses 7,231 7,769 -------------------------------------------------=========================== Net operating income (2) 7,756 7,680 ---------------------------------------------------------------------------- Trust expenses 850 758 -------------------------------------------------=========================== Income before interest, depreciation & amortization 6,906 6,922 ---------------------------------------------------------------------------- Interest 3,69 3,427 ---------------------------------------------------------------------------- Depreciation & amortization 5,042 5,012 -------------------------------------------------=========================== Loss before income tax, non-controlling interest and discontinued operations (1,834) (1,517) ---------------------------------------------------------------------------- Future income tax recovery - 1,440 -------------------------------------------------=========================== ---------------------------------------------------------------------------- Loss before non-controlling interest and discontinued operations (1,834) (77) ---------------------------------------------------------------------------- Non-controlling interest 605 501 -------------------------------------------------=========================== Loss before discontinued operations (1,229) 424 ---------------------------------------------------------------------------- Discontinued operations - 28 -------------------------------------------------=========================== (Loss)/Net Income (1,229) 452 ---------------------------------------------------------------------------- Funds From Operations (FFO) (3) 3,208 3,537 ---------------------------------------------------------------------------- FFO per Unit (adjusted for conversion of non- controlling interest) 0.12 0.13 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- FFO payout ratio based on accrued distributions 0.97 0.88 ---------------------------------------------------------------------------- Distributions -accrual basis 3,108 3,108 ---------------------------------------------------------------------------- Full Financial Results and MD&A will be available on SEDAR (www.sedar.com) as well as the Investors Relations section of the REIT's website (www.rmmreit.com). (1) Based on unaudited financial statements. (2) A non generally accepted accounting principle ("GAAP") measurement, calculated by the Trust as rental revenue (net rents, property tax and operating cost recoveries, as well as other miscellaneous income from tenants) less operating expenses from rental properties. (3) The reconciliations from Net income (loss) to Funds From Operations are included in the REIT's MD&A The REIT's management considers Net Operating Income and Funds From Operations to be indicative measures in evaluating the REIT's performance. The table above includes non-GAAP information that should not be construed as an alternative to net earnings or cash flows from operations and may not be comparable to similar measures presented by other issuers as there is no standardized meaning prescribed by GAAP. About Retrocom Mid-Market REITRetrocom Mid-Market REIT is an Ontario unincorporated open-end real estate investment trust which focuses on owning and acquiring mid-market properties in primary and secondary cities across Canada with the objective of producing a geographically diversified portfolio of properties with stable and growing cash flows.This document may contain forward-looking statements, which although based on Management's best estimates as well as the current operating environment are subject to risks and uncertainties. As such, terms such as "anticipate", "believe", "expect", "plan" or other similar words should be taken as forward-looking statements. As a result of these potential uncertainties, any future results could differ materially from the predictions listed herein. Although Retrocom makes every effort to meet our predictions as listed in this document, we are unable to control certain circumstances such as economic, competitive or commercial real estate conditions.This press release shall not constitute an offer to sell or the solicitation of an offer to buy, which may be made only by means of a prospectus, nor shall there be any sale of the Units in any state, province or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under securities laws of any such state, province or other jurisdiction. The Units of the Retrocom Mid-Market REIT have not been, and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered, sold or delivered in the United States absent registration or an application for exemption from the registration requirements of U.S. securities laws.FOR FURTHER INFORMATION PLEASE CONTACT: Retrocom Mid-Market Real Estate Investment Trust David Fiume Chief Executive Officer (416) 741-7999 (416) 741-7993 (FAX) dfiume@rmmreit.com