Partners Announces Results for the Second Quarter of 2019
Partners Real Estate Investment Trust (the "REIT," or "Partners") (TSX:PAR-UN.TO) today announced its results for the three month period ended June 30, 2019 (the "second quarter").
SECOND QUARTER 2019 HIGHLIGHTS
-- Comprehensive loss of $1.0 million, a decrease to income of $2.8 million when compared to the second quarter of 2018. This decrease was due to lower all property NOI from the loss of income from the sale of 11 properties in the Fall 2019, along with the current period's cost of selling the Quebec portfolio.
-- Revenues from income producing properties of $5.7 million, a reduction of $7.1 million when compared to the second quarter of 2018. This reduction in revenue is the result of the sale of twenty-two properties between September 2018 and May 2019.
-- Same property NOI of $2.3 million, an improvement of $0.2 million when compared to the second quarter of 2018, due to positive leasing activity and higher average minimum rent.
-- All property NOI of $3.4 million, a reduction of $4.5 million when compared to the second quarter of 2018 as a result of twenty-two properties disposed between September 2018 and May 2019.
-- FFO and AFFO per unit of $0.014 and $0.007, compared to $0.076 and $0.055, respectively, for the second quarter of 2018.
-- Occupancy of 97.3% at June 30, 2019, an improvement from 96.9% as at the end of 2018.
-- Debt to gross book value of 60.2%, a decrease from 62.1% at the end of 2018.
-- As announced on May 29, 2019, the Board has initiated a process to explore and evaluate strategic alternatives available to the REIT, which may include, but is not limited to a sale of the REIT itself; a business combination with another party; and any other options that may be available and considered by the Board to be in the best interests of the REIT and its unitholders. The Board has retained BMO Capital Markets to advise and assist the Board in its exploration and evaluation of strategic alternatives. The Board has not set a timetable for this process nor has it made any decisions related to any strategic alternatives at this time. There can be no assurance that the Board's review of strategic alternatives will result in a transaction.
As at and for the three months ended As at and for the six months ended Jun 30, 2019 Jun 30, 2018 Jun 30, 2019 Jun 30, 2018 Revenues from income producing properties $ 5,704,099 $ 12,823,282 $ 14,916,505 $ 25,798,644 Comprehensive income (loss) (1,022,340 ) 1,836,018 1,842,151 (447,868 ) Comprehensive income (loss) per unit - basic (0.02 ) 0.04 0.04 (0.01 ) NOI - same properties 2,322,185 2,122,009 4,540,396 4,123,385 NOI - all properties 3,406,420 7,861,818 8,871,179 15,586,421 FFO 671,153 3,493,154 3,679,095 6,729,456 FFO per unit 0.01 0.08 0.08 0.15 AFFO 310,821 2,548,879 2,622,949 4,866,491 AFFO per unit 0.01 0.06 0.06 0.11 ACFO 310,821 2,793,407 2,622,949 5,224,647 Distributions 695,818 2,903,771 2,789,113 5,790,824 Distributions per unit 0.02 0.06 0.06 0.13 ACFO distribution payout ratio 223.9 % 104.0 % 106.3 % 110.8 % Cash distributions 1,382,392 2,652,667 3,455,977 5,293,550 Cash distributions per unit 0.03 0.06 0.08 0.11 As at Jun 30, 2019 Dec 31, 2018 Dec 31, 2017 Total assets $ 110,189,065 $ 288,694,169 $ 475,045,178 Total debt - 180,009,332 283,331,535 Total equity 39,248,841 99,663,422 183,347,418 Weighted average units outstanding - basic 46,079,673 45,977,087 39,435,646 Weighted average units outstanding - diluted 46,492,424 46,292,330 39,559,729 Debt-to-gross book value including debentures 0.0 % 62.1 % 59.4 % Debt-to-gross book value excluding debentures 0.0 % 62.1 % 57.8 % Interest coverage ratio 2.71 2.52 2.02 Debt service coverage ratio 1.46 1.44 1.25 Mortgages weighted average effective interest rate 3.75 % 3.99 % 4.10 % Portfolio occupancy 97.3 % 96.9 % 95.3 %
(1) NOI - same properties and all properties, FFO, AFFO and ACFO are non-IFRS financial measures widely used in the real estate industry.
(2) Represents distributions to unitholders on an accrual basis. Distributions are payable as at the end of the period in which they are declared by the Board of Trustees, and are paid on or around the 15 day of the following month. Prior to November 1, 2018, distributions per unit include the 3% bonus units given to participants in the Distribution Reinvestment and the Deferred Unit Plan. On May 8, 2019, the Board of Trustees announced the termination of the regular monthly distribution.
(3) ACFO distribution payout ratio is a non-IFRS financial measure that has a standardized meaning under RealPac. It is calculated as total distributions as a percentage of ACFO (a new measure standardized by RealPac). There is no directly comparable IFRS measure.
(4) Represents distributions on a cash basis, and as such, excludes the non-cash distributions of units issued under the Distribution Reinvestment and the Deferred Unit Plan.
(5) Debt-to-gross book value is a non-IFRS financial measure widely used in the real estate industry. Non-IFRS measures do not have standardized meanings and are therefore unlikely to be comparable to similar measures presented by other issuers. There is no directly comparable IFRS measure.
(6) Interest coverage ratio and debt service coverage ratio are non-IFRS financial measures widely used in the real estate industry, calculated on a rolling four-quarter basis. Management considers the interest coverage and debt service coverage ratios to be valuable metrics in assessing the REIT's ability to make contractual payments on debt. Non-IFRS measures do not have standardized meanings and are therefore unlikely to be comparable to similar measures presented by other issuers. There are no directly comparable IFRS measures.
(7) Represents the weighted average effective interest rate for secured debt excluding debentures and credit facilities.
(8) Portfolio occupancy is calculated as economic occupancy, not physical occupancy. A unit is considered occupied once it is committed to a lease with a minimum one-year term.
"The results for the quarter reflect the sale of properties completed during the Fall 2018 and Spring 2019, along with the sustained focus on reducing operating expenses. We will continue this approach going forward as we strive to maximize value for our unitholders," stated Ian Ross, the REIT's interim CEO.
A more detailed analysis of the REIT's financial results for the second quarter of 2019 are included in the REIT's Management Discussion and Analysis and Condensed Consolidated Financial Statements, which have been filed on SEDAR and can be viewed at www.sedar.com or on the REITs' website at www.partnersreit.com.
About Partners REIT
Partners REIT is a real estate investment trust focused on the management of a portfolio of 12 retail and mixed-use community and neighbourhood shopping centres. These properties are located in both primary and secondary markets across Manitoba and Ontario, and comprise a total of approximately 0.6 million square feet of leasable space.
Certain statements included in this press release constitute forward-looking statements, including, but not limited to, those identified by the expressions "expect," "will" and similar expressions to the extent they relate to Partners REIT. The forward- looking statements are not historical facts but reflect Partners REIT's current expectations regarding future results or events. These forward looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including access to capital, regulatory approvals, intended acquisitions and general economic and industry conditions. Although Partners REIT believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and, accordingly, readers are cautioned not to place undue reliance on such statements due to the inherent uncertainty therein.
For further information please contact:
Partners REIT Investor Relations
1 (844) 474-9620 ext. 401
C. Ian Ross
Chairman of the Board and Interim Chief Executive Officer
(416) 855-3313 ext. 501
Derrick West, CPA (CA)
Chief Financial Officer and Corporate Secretary
(416) 855-3313 ext. 503