MONTREAL, March 23, 2018 (GLOBE NEWSWIRE) — (TSX-V: GAZ.UN) Fronsac Real Estate Investment Trust (“Fronsac REIT” or “Fronsac”) today announced its results for the year 2017, and that it will make monthly cash distributions of 0.168¢ per unit, representing 2.016¢ per unit on an annualized basis, on April 30st, May 31th and June 29th 2018 to unitholders of record on April 16th, May 15th and June 15th 2018, respectively.
For the quarter ended December 31th, 2017, Fronsac reported recurring funds from operations (“Recurring FFO”) per unit of 0.72¢ compared to 0.67¢ per unit for the quarter ended December 31th, 2016, an increase of 8%. Recurring FFO was $548,042, an increase of 39% ($394,989 in Q4 2016). During Q4 2017 the Trust’s property rental income was $1,316,577 compared to $874,879 in Q4 2016, an increase of 51%. NOI (Net operating Income) was $1,021,095 compared to $737,681 in Q4 2016, an increase of 38%. Fronsac recorded a net income attributable to unitholders of $1,839,189, or 2.41¢ per unit, compared to a gain of $678,913, or 1.15¢ per unit, in Q4 2016.
For the twelve months ended December 31th, 2017, Fronsac reported recurring funds from operations (“Recurring FFO”) per unit of 3.17¢ compared to 2.48¢ per unit for the period ended December 31th, 2016, an increase of 28%. Recurring FFO was $2,137,217, an increase of 65% ($1.297,438 in 2016). During 2017 the Trust’s property rental income was $4,359,277 compared to $2,837,021 in 2016, an increase of 54%. NOI (Net operating Income) was $3,487,615 compared to $2,580,709 in 2016, an increase of 35%. Fronsac recorded a net income attributable to unitholders of $4,540,944, or 6.74¢ per unit, compared to net income of $3,196,819, or 6.10¢ per unit, in 2016.
Jason Parravano President and CEO said: “2017 has been a very active year for Fronsac, having completed the purchase of 11 investment properties. In doing so we have continued to grow our per unit results as well as diversify our tenant base.”
The tables below represent other financial highlights as well as the reconciliation from net income to FFO for the periods ended December 31th, 2017 and its comparative period. This information should be read in conjunction with the Audited Consolidated Financials Statements and MD&A for the quarters ended December 31th, 2017 and December 31th, 2016.
| SUMMARY OF SELECTED ANNUAL INFORMATION | ||||||||
| 12 months | ||||||||
| Periods ended December 31 | 2017 | 2016 | Change | % | ||||
| Financial info | ||||||||
| Property rental income | 4,359,277 | 2,837,021 | 1,522,256 | 54 | % | |||
| Total revenue | 4,369,277 | 2,992,371 | 1,376,906 | 46 | % | |||
| NOI (1) | 3,487,615 | 2,580,709 | 906,906 | 35 | % | |||
| FFO (1)(4) | 2,147,217 | 1,212,796 | 934,421 | 77 | % | |||
| Recurring FFO (1)(4) | 2,137,217 | 1,297,438 | 839,779 | 65 | % | |||
| AFFO (1) | 2,014,775 | 1,371,167 | 643,608 | 47 | % | |||
| EBITDA (1) | 3,013,742 | 1,915,937 | 1,097,805 | 57 | % | |||
| Investment properties (2) | 69,588,555 | 48,065,082 | 21,523,473 | 45 | % | |||
| Total assets | 70,006,481 | 48,355,249 | 21,651,232 | 45 | % | |||
| Total mortgage/loans/long term debt (3) | 31,716,924 | 24,547,956 | 7,168,968 | 29 | % | |||
| Total exchangeable preferred units | – | 945,830 | (945,830 | ) | (100 | %) | ||
| Total convertible debentures | 250,581 | 249,149 | 1,432 | 1 | % | |||
| Total equity | 36,708,396 | 21,419,308 | 15,289,088 | 71 | % | |||
| Weighted average units o/s – basic | 67,398,715 | 52,403,772 | 14,994,943 | 29 | % | |||
| Amounts on a per unit basis | ||||||||
| FFO | 0.0319 | 0.0231 | 0.0088 | 38 | % | |||
| Recurring FFO | 0.0317 | 0.0248 | 0.0070 | 28 | % | |||
| AFFO | 0.0299 | 0.0262 | 0.0037 | 14 | % | |||
| Distributions | 0.0180 | 0.0161 | 0.0018 | 11 | % | |||
| (1) Non-IFRS financial measures | ||||||||
| (2) Includes value of investment properties owned through joint ventures | ||||||||
| (3) Excludes convertible debentures and exchangeable preferred units | ||||||||
| (4) Q1 2016 included revenues of $150K related to a one-time payment received for the renewal of a lease. This amount was subtracted from the Trust’s FFO to arrive at the Recurring FFO for 2016 | ||||||||
| RECONCILIATION OF NET INCOME TO FFO | ||||||||||||||||||
| 3 months |
12 months |
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| Periods ended December 31 | 2017 | 2016 | Change | 2017 | 2016 | Change | ||||||||||||
| Net income (loss) attributable to unitholders | 1,839,189 | 678,913 | 1,160,276 | 4,540,944 | 3,196,819 | 1,344,125 | ||||||||||||
| Change in value of investment properties | (787,749 | ) | (283,708 | ) | (504,041 | ) | (2,174,622 | ) | (2,088,379 | ) | (86,243 | ) | ||||||
| Change in value of investment properties in joint ventures | (7,260 | ) | (19,771 | ) | 12,511 | (148,900 | ) | (47,755 | ) | (101,145 | ) | |||||||
| Unit based compensation | 2,920 | (200 | ) | 3,120 | 70,745 | 40,875 | 29,870 | |||||||||||
| Change in liability component of exchangeable preferred units | 7,568 | 6,596 | 972 | 43,832 | 40,070 | 3,762 | ||||||||||||
| Change in fair value of derivative financial instruments | (524,994 | ) | (4,620 | ) | (520,374 | ) | (230,380 | ) | 48,515 | (278,895 | ) | |||||||
| Change in fair value of other financial components | 13,750 | (1,045 | ) | 14,795 | 40,980 | 3,605 | 37,375 | |||||||||||
| Income taxes | 4,618 | 18,824 | (14,206 | ) | 4,618 | 19,046 | (14,428 | ) | ||||||||||
| FFO(1) – basic | 548,042 | 394,989 | 39 | % | 2,147,217 | 1,212,796 | 77 | % | ||||||||||
| FFO per unit – basic | 0.0072 | 0.0067 | 8 | % | 0.0319 | 0.0231 | 38 | % | ||||||||||
| Distributions paid on exchangeable units (if dilutive) | – | 12,585 | (12,585 | ) | 15,000 | 49,720 | (34,720 | ) | ||||||||||
| FFO – diluted | 548,042 | 407,574 | 34 | % | 2,162,217 | 1,262,516 | 71 | % | ||||||||||
| FFO per unit – diluted | 0.0072 | 0.0065 | 10 | % | 0.0318 | 0.0228 | 40 | % | ||||||||||
| Recurring FFO – basic | 548,042 | 394,989 | 39 | % | 2,137,217 | 1,297,438 | 65 | % | ||||||||||
| Recurring FFO per unit – basic | 0.0072 | 0.0067 | 8 | % | 0.0317 | 0.0248 | 28 | % | ||||||||||
| Distributions | 385,162 | 241,441 | 143,721 | 1,277,539 | 851,796 | 425,742 | ||||||||||||
| Distributions per unit | 0.0045 | 0.0041 | 10 | % | 0.0180 | 0.0161 | 12 | % | ||||||||||
| FFO – basic after distributions | 0.0027 | 0.0026 | 0.0001 | 0.0139 | 0.0070 | 0.0068 | ||||||||||||
| Recurring FFO – basic after distributions | 0.0027 | 0.0026 | 0.0001 | 0.0137 | 0.0087 | 0.0051 | ||||||||||||
| Distributions as a % of | ||||||||||||||||||
| FFO – basic | 63 | % | 61 | % | 2 | % | 56 | % | 70 | % | (13 | %) | ||||||
| Distributions as a % of | ||||||||||||||||||
| Recurring FFO – basic | 63 | % | 61 | % | 2 | % | 57 | % | 65 | % | (8 | %) | ||||||
| Weighted avg. units o/s | ||||||||||||||||||
| Basic | 76,378,013 | 59,249,263 | 17,128,750 | 67,398,715 | 52,403,772 | 14,994,943 | ||||||||||||
| Diluted | 76,378,013 | 62,337,463 | 14,040,550 | 67,980,110 | 55,491,972 | 12,488,138 | ||||||||||||
| (1) FFO is a Non-IFRS financial measure | ||||||||||||||||||
About Fronsac – Fronsac Real Estate Investment Trust is an open-ended trust that acquires and owns high quality triple net and management-free commercial real estate properties.
Forward-Looking Statements – This press release contains forward-looking statements and information as defined by applicable securities laws. Fronsac warns the reader that actual events may differ materially from current expectations due to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated in such statements. Among these include the risks related to economic conditions, the risks associated with the local real estate market, the dependence to the financial condition of tenants, the uncertainties related to real estate activities, the changes in interest rates, the availability of financing in the form of debt or equity, the effects related to the adoption of new standards, as well as other risks and factors described from time to time in the documents filed by Fronsac with securities regulators, including the management report. Fronsac does not update or modify its forward-looking statements even if future events occur or for any other reason, unless required by law or any regulatory authority.
Neither the TSX Venture Exchange Inc., nor its Regulatory Services Provider (as that term is defined in the Policy of the TSX Venture Exchange and its Regulatory Services Provide) accepts any responsibility for the adequacy or accuracy of this release.
The December 31th, 2017 financial statements and management discussion & analysis of Fronsac REIT may be viewed on SEDAR at www.sedar.com
For further information please contact Jason Parravano at (450) 536-5328.