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Press release from CNW Group

Morguard Corporation Announces 2011 Second Quarter Results and Regular Eligible Dividend

Tuesday, August 09, 2011

Morguard Corporation Announces 2011 Second Quarter Results and Regular Eligible Dividend16:15 EDT Tuesday, August 09, 2011TSX: MRCMISSISSAUGA, ON, Aug. 9, 2011 /CNW/ - Morguard Corporation (TSX: MRC) announced its financial results for the three months ended June 30, 2011.These results are, and all future results will be, reported under International Financial Reporting Standards (IFRS) and historical results have been restated to IFRS for comparison purposes.  Reconciliations between IFRS and Canadian Generally Accepted Accounting Principles have been included in the Company's unaudited interim consolidated financial statements for the period ended June 30, 2011.HIGHLIGHTSTotal revenues for the three months ended June 30, 2010, were $95.7 million compared to $91.6 million for the same period in 2010;Total net operating income in Q2 2011 increased to $41.1 million compared to $39.8 million in Q2 2010;Net income attributable to common shareholders in Q2 2011 totalled $49.7 million compared to $47.5 million in 2010;Funds from operations in Q2 2011 increased to $2.14 per share, compared to $2.06 per share in 2010, representing an increase of 3.9%.FINANCIAL HIGHLIGHTS       Three months endedJune 30Six months endedJune 30(in thousands of dollars)2011201020112010Revenue from real estate properties$73,980$71,052$146,629$139,987Management and advisory fees17,22616,96533,98631,584Interest and other3,0392,4655,8624,188Sales of product and land1,4241,0993,0902,309Total revenues$95,669$91,581$189,567$178,068     Revenue from real estate properties$73,980$71,052$146,629$139,987Property operating expense  (32,891)(31,248)  (65,986)(64,019)Net operating income$41,089$39,804$80,643$75,968     Funds from operations$27,695$27,633$60,748$52,140     Net income attributable to common shareholders$49,721$47,536$106,954$62,561     Weighted average common shares outstanding -basic and diluted12,96613,43212,96613,724Income per share            Basic and diluted- net income$3.83$3.54$8.25$4.56NET INCOMENet income attributable to the shareholders for the three months ended June 30, 2011, was $49.7 million ($3.83 per share) compared to $47.5 million ($3.54 per share) in 2010. The increase in net income of $2.2 million for the three months ended June 30, 2011, was primarily due to an increase in fair value gains on real estate properties of $4.9 million,  an increase in net operating income of $1.3 million and an increase in interest and other income of $0.6 million; these items were partially offset by a decrease in the equity income from Morguard REIT of $2.0 million, an increase in interest expense of $0.8 million and an increase in income taxes of $2.0 million.NET OPERATING INCOME  Three months endedJune 30Six months endedJune 30(in thousands of dollars)2011201020112010Net operating income - Canadian properties          Multi-unit residential - Canada$13,160$13,293$25,404$24,429      Retail - Canada7,9819,12515,09717,011      Office and industrial10,3068,76021,14717,507 31,44731,17861,64858,947Net operating income - U.S. properties in U.S. dollars          Multi-unit residential - U.S.US 4,360US 3,776US  8,770US   7,561      Retail - U.S.US 5,601US 4,613US 10,676US   8,897 US 9,961US 8,389US 19,446US 16,458Exchange amount to Canadian dollars(319)237(451)563Net operating income - U.S. properties in Canadian dollars9,6428,62618,99517,021Net operating income$41,089$39,804$80,643$75,968Net operating income ("NOI") for the three months ended June 30, 2011, increased by $1,285 to $41,089 compared to $39,804 in 2010, representing an increase of 3.2%.  The increase was predominantly the result of the following:Higher NOI in office and industrial primarily as a result of the acquisition of Place Innovation, St. Laurent, Quebec which occurred on July 30, 2010, in the amount of $1,874;Higher NOI in U.S. multi-unit residential properties primarily as a result of lower vacancy rates;Higher NOI in U.S. retail properties primarily as a result of the acquisition of Boynton Town Centre, which occurred on February 28, 2011, in the amount of $1,253;Offset by:Lower NOI in the Canadian retail properties due to the sale of a 50% interest in Prairie Mall, Grande Prairie, Alberta, on May 31, 2010, in the amount of $578.  In addition, there was a decrease of $336 at a retail property whose NOI is based on a formula that includes cash flow and working capital; the decrease in NOI is primarily the result of changes in the property's working capital.FUNDS FROM OPERATIONS ("FFO")FFO was calculated as follows: Three months ended June 30Six months endedJune 30(In thousands of dollars, except for per share amounts)2011201020112010Net income attributable to common shareholders$49,721$47,536$106,954$62,561Items not affecting cash:         Fair value gains on real estate properties(21,379)(16,432)(57,243)(12,642)     Future income taxes9,0358,99922,13312,282     Depreciation on owner occupied property26265252     Equity income from Morguard REIT(18,305)(20,261)(28,743)(25,480)     Morguard REIT's equity accounted FFO8,6737,55417,58815,156    (Gain) loss on sale of property(76)2117211Funds from operations$27,695$27,633$60,748$52,140Funds from operations   Per share amounts - basic and diluted$2.14$2.06$4.69$3.80For the three months ended June 30, 2011, the Company recorded FFO of $27.7 million ($2.14 per share) compared to $27.6 million ($2.06 per share) in 2010.THIRD QUARTER DIVIDENDThe board of directors of Morguard Corporation announced today that the third quarterly, eligible dividend of 2011 in the amount of $0.15 per common share will be paid on September 30, 2011 to shareholders of record at the close of business on September 15, 2011.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 interim unaudited financial statements for the three months ended June 30, 2011, 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 10,311 multi-unit residential suites and approximately 7.1 million square feet of commercial leasable space. Morguard Corporation also owns a 45% interest in Morguard Real Estate Investment Trust. 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          Paul Miatello Chief Executive Officer         Chief Financial Officer (905) 281-3800          (905) 281-3800