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Press release from CNW Group

Morguard Corporation Announces 2010 Second Quarter Results and Regular Eligible Dividend

Thursday, August 05, 2010

Morguard Corporation Announces 2010 Second Quarter Results and Regular Eligible Dividend17:09 EDT Thursday, August 05, 2010TSX: MRCMISSISSAUGA, ON, Aug. 5 /CNW/ - Morguard Corporation (TSX: MRC) announced its financial results for the three months ended June 30, 2010.HIGHLIGHTS << - Total revenues for the three months ended June 30, 2010, were $87.1 million compared to $86.0 million for the same period in 2009; - Net operating income in Q2 2010 increased to $38.9 million compared to $37.7 million in Q2 2009; - Net income in Q2 2010 totalled $17.3 million compared to $6.7 million in 2009; - Funds from operations in Q2 2010 are unchanged at $28.7 million, or $2.13 per share, compared to $28.7 million, or $2.04 per share in 2009; - Sold a 50% interest in a retail shopping centre located in Grande Prairie, Alberta, to Morguard REIT realizing a pre-tax gain on sale of $9.7 million; and - On July 30, 2010, the Company and Morguard REIT, acquired an office property and excess land located in Montreal, Quebec for a purchase price of $165 million (100%). The acquisition was funded by cash and a ten year mortgage payable of $88 million (100%) at an interest rate of 5.475%. The Company's ownership in the acquisition is a 50% interest. FINANCIAL HIGHLIGHTS ------------------------------------------------------------------------- Three months ended Six months ended June 30 June 30 (in thousands of dollars) 2010 2009 2010 2009 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Income from real estate properties $69,454 $70,118 $136,708 $142,178 Management and advisory fee revenue 16,549 14,630 30,696 29,355 Sales of product and land 1,099 1,293 2,309 2,539 ------------------------------------------------------------------------- Total revenues $87,102 $86,041 $169,713 $174,072 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Income from real estate properties $69,454 $70,118 $136,708 $142,178 Property operating expense (30,570) (32,442) (62,543) (66,344) ------------------------------------------------------------------------- Net operating income $38,884 $37,676 $74,165 $75,834 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Funds from operations $28,663 $28,666 $52,553 $56,239 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net income $17,348 $6,723 $21,812 $11,552 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Income per share Basic - continuing operations $1.29 $0.47 $1.58 $0.81 Diluted - continuing operations $1.29 $0.47 $1.58 $0.81 Basic - net income $1.29 $0.48 $1.59 $0.82 Diluted - net income $1.29 $0.48 $1.59 $0.82 NET INCOME Net income for the three months ended June 30, 2010, was $17.3 million ($1.29 per share) compared to $6.7 million ($0.48 per share) in 2009. The increase in net income of $10.6 million was primarily due to gain on sale of 50% interest in Prairie Mall, Grande Prairie, Alberta, in the amount of $9.7 million and an increase in management and advisory fee revenue partially offset by an increase in current income tax expense. NET OPERATING INCOME Three months ended Six months ended June 30 June 30 (in thousands of dollars) 2010 2009 2010 2009 ------------------------------------------------------------------------- Net operating income - Canadian properties Multi-unit residential $13,366 $12,025 $24,590 $22,672 Retail 7,853 6,642 14,426 13,632 Office and industrial 8,756 8,532 17,535 17,383 ------------------------------------------------------------------------- 29,975 27,199 56,551 53,687 ------------------------------------------------------------------------- Net operating income - U.S. properties in U.S. dollars Multi-unit residential US 3,775 US 3,918 US 7,548 US 8,119 Retail US 4,893 US 5,060 US 9,487 US 10,250 ------------------------------------------------------------------------- US 8,668 US 8,978 US 17,035 US 18,369 Exchange amount to Canadian dollars 241 1,499 579 3,778 ------------------------------------------------------------------------- Net operating income - U.S. properties in Canadian dollars 8,909 10,477 17,614 22,147 ------------------------------------------------------------------------- Net operating income $38,884 $37,676 $74,165 $75,834 ------------------------------------------------------------------------- Net operating income for the three months ended June 30, 2010, increased to $38.9 million compared to $37.7 million in 2009, representing an increase of 3.2%. Net operating income increased predominantly as a result of lower utility expenses for the Canadian multi-unit residential properties and an increase in revenue in the Canadian retail portfolio. The increase was partially offset by the change in the U.S. dollar foreign exchange rate, which decreased 17% as compared to 2009. FUNDS FROM OPERATIONS ("FFO") FFO was calculated as follows: ------------------------------------------------------------------------- Three months ended Six months ended June 30 June 30 (in thousands of dollars) 2010 2009 2010 2009 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net earnings from continuing operations $17,299 $6,615 $21,701 $11,362 Items not affecting cash: Amortization 14,966 16,420 30,733 33,691 Future income taxes 1,521 1,251 631 1,780 Non-controlling interest (42) - (75) - Equity income from Morguard REIT - continuing operations (2,739) (3,972) (5,747) (7,136) Morguard REIT's equity accounted FFO - continuing operations operations 7,580 8,316 15,170 15,974 Gain on sale of property (9,971) (72) (9,971) (72) Other 49 108 111 640 ------------------------------------------------------------------------- Funds from operations $28,663 $28,666 $52,553 $56,239 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Per share amount - basic $2.13 $2.04 $3.83 $4.00 Per share amounts - diluted diluted $2.13 $2.04 $3.83 $4.00 >> For the three months ended June 30, 2010, the Company recorded FFO of $28.7 million ($2.13 per diluted share) compared to $28.7 million ($2.04 per diluted share) in 2009. The net effect of the change in foreign exchange rates decreased FFO by $482 ($0.03 per share).THIRD QUARTER DIVIDENDThe board of directors of Morguard Corporation announced today that the third quarterly, eligible dividend of 2010 in the amount of $0.15 per common share will be paid on September 30, 2010 to shareholders of record at the close of business on September 15, 2010.Readers are cautioned that although the terms "Net Operating Income", and "Funds From Operations" are commonly used to measure, compare and explain the operating and financial performance of Canadian real estate companies and such terms are defined in the Management's Discussion and Analysis, such terms are not recognized terms under Canadian generally accepted accounting principles. Such terms do not necessarily have a standardized meaning and may not be comparable to similarly titled measures presented by the other publicly traded entities.The Company's unaudited financial statements for the three months ended June 30, 2010, along with Management's Discussion and Analysis are available on the Company's website at www.morguard.com and have been filed with SEDAR at www.sedar.com.Morguard Corporation is a real estate company, which owns a diversified portfolio of 100 retail, multi-unit residential, office and industrial properties comprising 10,297 multi-unit residential suites and approximately 6.4 million square feet of commercial leasable space. Morguard provides advisory and management services to institutional and other investors through Morguard Investments Limited and Morguard Residential. For more information, visit the Company's website at www.morguard.com.For further information: Morguard Corporation, K. (Rai) Sahi, Chief Executive Officer, (905) 281-3800; Paul Miatello, Chief Financial Officer, (905) 281-3800