TORONTO, Feb. 15, 2018 (GLOBE NEWSWIRE) — Canadian Real Estate Investment Trust (“CREIT”) (TSX:REF.UN) today announced its financial results for the three months and year ended December 31, 2017.
|Three months ended||Year ended|
|($000s except per-Unit amounts and other data)||December 31,
|Net income per Unit||$||1.15||$||0.27||$||3.33||$||1.85|
|Property rental revenue||104,381||103,070||413,591||402,590|
|Net operating income||69,247||67,717||272,123||265,043|
|Fair value gains (losses), net||(793||)||(31,820||)||(51,499||)||(102,817||)|
|Property rental revenue||117,895||115,790||468,047||450,487|
|Net operating income||78,226||75,990||308,240||296,377|
|Fair value gains (losses), net||15,780||(39,481||)||(4,381||)||(94,724||)|
|Funds from operations (FFO)||61,177||61,488||245,772||239,753|
|FFO per Unit||0.83||0.84||3.35||3.28|
|Adjusted funds from operations (AFFO)||46,860||40,214||202,866||184,789|
|AFFO per Unit||0.64||0.55||2.77||2.53|
|Adjusted cash flow from operations (ACFO)||44,843||39,752||200,757||185,902|
|ACFO payout ratio||76.5||%||84.3||%||67.8||%||71.6||%|
|Excess of ACFO over cash distributions before distribution reinvestment||10,546||6,254||64,647||52,750|
|(1) A non-IFRS measure, includes amounts from both directly held properties and equity accounted investments.|
Stephen Johnson, Chief Executive Officer, said, “Overall, 2017 has been a successful year. We had strong financial results; we continued to add quality assets to our portfolio; we completed the divesture of a number of non-core assets; we gained solid traction on our multi-residential initiative; and we continued to maintain a strong and flexible balance sheet.”
Net income for the three months ended December 31, 2017 increased to $84.6 million from $19.7 million for the same period in 2016. The increase is primarily due to a $31.0 million net change in fair value gains on investment properties on an IFRS basis ($55.3 million on a proportionate basis) and a $10.9 million decline in the deferred income tax liability related to a U.S. asset.
For the three months ended December 31, 2017, CREIT reported FFO of $0.83 per Unit compared to $0.84 per Unit for the same period in 2016. The results include lease termination income of $0.7 million earned during the three months ended December 31, 2017 ($1.1 million for the three months ended December 31, 2016). Excluding the impact of lease termination income, FFO for the fourth quarter was $0.82 per Unit for both 2017 and 2016.
Net income for the year ended December 31, 2017 increased to $244.3 million from $135.6 million for the same period in 2016. The increase is primarily due to a $51.3 million net change in fair value gains on investment properties on an IFRS basis ($90.3 million on a proportionate basis) and a $12.1 million decline in the deferred income tax liability related to a U.S. asset.
For the year ended December 31, 2017, CREIT reported FFO of $3.35 per Unit, an increase of 2.1% over the same period in 2016. The results include lease termination income of $1.8 million earned during the year ended December 31, 2017 and $9.1 million over the same period in 2016. Excluding the impact of lease termination income in both periods, FFO for 2017 increased by 5.7% over the prior year ($3.33 per Unit in 2017, up from $3.15 per Unit in 2016).
Conference Call and Webcast
Given the announcement made earlier today regarding the combination of CREIT and Choice Properties REIT, the conference call and webcast previously scheduled for 11:00am on Thursday, February 15, 2018, has been cancelled.
CREIT is a real estate investment trust focused on accumulating and aggressively managing a portfolio of high-quality real estate assets and delivering the benefits of real estate ownership to Unitholders. The primary benefit is a reliable and, over time, increasing monthly cash distribution. CREIT owns a diversified portfolio of retail, industrial and office properties.
Non-IFRS Financial Measures and Additional Financial Information
In addition to using performance measures determined in accordance with International Financial Reporting Standards (“IFRS”), CREIT also measures its performance using certain additional non-IFRS measures, and provides these measures in this press release so that investors may do the same. Such measures and related per-Unit amounts are not defined by IFRS and therefore should not be construed as alternatives to net income or cash flow from operating activities determined in accordance with IFRS. Furthermore, the supplemental measures used by Management may not be comparable to similar measures presented by other real estate investment trusts or enterprises. These terms, which include the proportionate basis of accounting, net operating income (“NOI”), funds from operations (“FFO”), adjusted funds from operations (“AFFO”), adjusted cash flow from operations (“ACFO”) and excess of ACFO over cash distributions before distribution reinvestment, are defined in the “Non-IFRS Financial Measures” section in Part I of the CREIT Management’s Discussion and Analysis of Results of Operations and Financial Condition (“MD&A”) for the year ended December 31, 2017 and are cross referenced, as applicable, to a reconciliation elsewhere in the MD&A to the most comparable IFRS measure.
CREIT’s Consolidated Financial Statements and MD&A for the year ended December 31, 2017 are available on CREIT’s website at www.creit.ca. Readers are directed to these documents for financial details on CREIT’s results.
Cautionary Statements Regarding Forward-looking Statements
This news release contains forward-looking statements relating to our operations and the environment in which we operate, which are based on our expectations, estimates, forecasts and projections. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. Therefore, actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made. We undertake no obligation to publicly update any such statement, to reflect new information or the occurrence of future events or circumstances, except as required by law.
For further information, please contact:
Chief Executive Officer
Chief Operating Officer
Chief Financial Officer