The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from CNW Group

Morguard Corporation Announces 2010 Third Quarter Results and Regular Eligible Dividend

Tuesday, November 02, 2010

Morguard Corporation Announces 2010 Third Quarter Results and Regular Eligible Dividend17:27 EDT Tuesday, November 02, 2010TSX: MRCMISSISSAUGA, ON, Nov. 2 /CNW/ - Morguard Corporation (TSX: MRC) announced its financial results for the three months ended September 30, 2010.HIGHLIGHTSFunds from operations in Q3 2010 increased to $29.5 million, or $2.22 per share, compared to $28.1 million, or $2.00 per share in 2009;Net income in Q3 2010 totalled $10.1 million compared to $5.8 million in 2009;Total revenues for the three months ended September 30, 2010, were $86.7 million compared to $87.1 million for the same period in 2009;Net operating income in Q3 2010 was $37.4 million compared to $38.0 million in Q3 2009;On July 30, 2010, the Company and Morguard REIT, acquired an office property and excess land located in St. Laurent, 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 5.48%.  The Company's ownership in the acquisition is a 50% interest;The Company repurchased and cancelled 331,250 common shares during the three months ended September 30, 2010 at a total cost of $14,058.FINANCIAL HIGHLIGHTS        Three months endedSeptember 30Nine months endedSeptember 30(in thousands of dollars)2010200920102009Income from real estate properties$70,145$69,628$206,853$211,806Management and advisory fee revenue15,11116,18545,80745,540Sales of product and land1,4191,3283,7283,867Total revenues$86,675$87,141$256,388$261,213     Income from real estate properties$70,145$69,628$206,853$211,806Property operating expense  (32,783)(31,637)  (95,326)(97,981)Net operating income$37,362$37,991$111,527$113,825     Funds from operations$29,476$28,125$82,028$84,216     Net income$10,053$5,828$31,865$17,380     Income per share            Basic - continuing operations$0.76$0.41$2.32$1.22        Diluted - continuing operations$0.76$0.41$2.32$1.22        Basic - net income$0.76$0.42$2.33$1.24        Diluted - net income $0.76$0.42$2.33$1.24NET INCOMENet income for the three months ended September 30, 2010, was $10.1 million ($0.76 per share) compared to $5.8 million ($0.42 per share) in 2009. The increase in net income of $4.2 million was primarily due to an increase in the equity accounted income from Morguard REIT of $1.3 million, an increase in the dividend and other income of $1.7 million and a decrease in income tax expense of $3.4 million partially offset by a decrease in management and advisory fees of $1.1 million and lower net operating income ("NOI") of $0.6 million.NET OPERATING INCOME Three months endedSeptember 30Nine months endedSeptember 30(in thousands of dollars)2010200920102009Net operating income - Canadian properties          Multi-unit residential$12,451$13,443$37,040$36,116      Retail5,7896,26220,21420,106      Office and industrial9,7978,90527,33126,295 28,03728,61084,58582,517Net operating income - U.S. properties in U.S. dollars          Multi-unit residentialUS 4,085US 3,760US  11,636US 11,709      RetailUS 4,881US 4,784US  14,371US 15,055 US 8,966US 8,544US 26,007US 26,764Exchange amount to Canadian dollars3598379354,544Net operating income - U.S. properties in Canadian dollars9,3259,38126,94231,308Net operating income$37,362$37,991$111,527$113,825Net operating income for the three months ended September 30, 2010, decreased to $37.4 million compared to $38.0 million in 2009, representing a decrease of 1.7%.   The decrease was primarily the result of the following:a payment received and recorded in 2009 in the amount of $1,029 related to the settlement of a contract to purchase natural gas for the Company's Canadian multi-unit residential properties;lower Retail NOI due to the sale of a 50% interest in Prairie Mall, Grande Prairie, Alberta, on May 31, 2010, in the amount of $639;a 6% decrease in the U.S. dollar foreign exchange rate, which decreased NOI by $478;Offset by:higher NOI as a result of the acquisition of Place Innovation which occurred on July 30, 2010, in the amount of $1,111. FUNDS FROM OPERATIONS ("FFO")FFO was calculated as follows:  Three months endedSeptember 30Nine months endedSeptember 30(in thousands of dollars) 2010200920102009Net earnings from continuing operations$10,053$5,754$31,754$17,116Items not affecting cash:           Amortization 15,35116,46346,08450,154       Future income taxes (978)2,011(347)3,791       Non-controlling interest (43)(25)(118)(25)Equity income from Morguard REIT - continuing operations(3,011)(1,612)(8,758)(8,748)Morguard REIT's equity accounted FFO - continuing operations operations8,1045,46023,27321,286Gain on sale of property--(9,971)(72)Other -74111714Funds from operations $29,476$28,125$82,028$84,216Per share amount - basic $2.22$2.00$6.01$5.99Per share amounts - diluted diluted $2.22$2.00$6.01       $5.99For the three months ended September 30, 2010, the Company recorded FFO of $29.5 million ($2.22 per diluted share) compared to $28.1 million ($2.00 per diluted share) in 2009.  The net effect of the change in foreign exchange rates decreased FFO by $131 ($0.01 per share).FOURTH QUARTER DIVIDENDThe board of directors of Morguard Corporation announced today that the fourth quarterly, eligible dividend of 2010 in the amount of $0.15 per common share will be paid on December 31, 2010 to shareholders of record at the close of business on December 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 and have been filed with SEDAR at .Morguard Corporation is a real estate company, which owns a diversified portfolio of 101 retail, multi-unit residential, office and industrial properties comprising 10,299 multi-unit residential suites and approximately 6.9 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 further information: Morguard CorporationK. (Rai) SahiPaul MiatelloChief Executive OfficerChief Financial Officer(905) 281-3800(905) 281-3800