Fronsac Announces Solid Results for the Quarter Ended March 31, 2018 and Its Distributions for the Months of July, August and September 2018

MONTREAL, May 25, 2018 (GLOBE NEWSWIRE) — (TSX-V:GAZ.UN) Fronsac Real Estate Investment Trust (“Fronsac REIT” or “Fronsac”) today announced its results for the quarter ended March 31st, 2018, and that it will make monthly cash distributions of 0.168¢ per unit, representing 2.016¢ per unit on an annualized basis, on July 31st, August 31st and September 28th, 2018 to unitholders of record on July 16th, August 15th and September 14th, 2018, respectively.

For the quarter ended March 31th, 2018, Fronsac reported recurring funds from operations (“Recurring FFO”) per unit of 0.91¢ compared to 0.86¢ per unit for the quarter ended March 31th, 2017, an increase of 6%. Recurring FFO was $777,049, an increase of 53% ($509,113 in Q1 2017). During Q1 2018 the Trust’s property rental income was $1,361,751 compared to $969,635 in Q1 2017, an increase of 40%. NOI (Net operating Income) was $1,088,893 compared to $781,131 in Q1 2017, an increase of 39%. Fronsac recorded a net income attributable to unitholders of $1,373,354, or 1.6¢ per unit, compared to a net income of $1,840,152, or 3.1¢ per unit, in Q1 2017.

Jason Parravano President and CEO said: “2018 is off to a great start for Fronsac. We completed our Benny & Co. development in Cap Rouge, Quebec as well as our largest single property acquisition to date, the Bureau en Gros in Gatineau, Quebec. We continue to stay true to our business model and fuel our pipeline with acquisitions which are immediately accretive to our per unit results.”

The tables below represent other financial highlights as well as the reconciliation from net income to FFO for the periods ended March 31th, 2018 and its comparative period. This information should be read in conjunction with the Consolidated Financials Statements and MD&A for the quarters ended March 31th, 2018 and March 31th, 2017.

 
SUMMARY OF SELECTED ANNUAL INFORMATION
  3 months        
Periods ended March 31 2018 2017     Change %
Financial info            
Property rental income 1,361,751 969,635     392,116 40%
Total revenue 1,376,751 969,635     407,116 42%
NOI (1) 1,088,893 781,131     307,762 39%
FFO (1) 792,049 509,113     282,936 56%
Recurring FFO (1) 777,049 509,113     267,936 53%
AFFO (1) 790,780 500,268     290,512 58%
EBITDA (1) 1,014,097 691,099     322,998 47%
Investment properties (2) 77,974,669 50,873,143     27,101,526 53%
Total assets 77,151,567 50,318,833     26,832,734 53%
Total mortgage/loans/long term debt (3) 37,809,315 24,991,267     12,818,048 51%
Total exchangeable preferred units 956,072     (956,072) (100%)
Total convertible debentures 254,714 253,259     1,455 1%
Total equity 37,690,821 23,022,113     14,668,708 64%
Weighted average units o/s – basic 85,659,099 59,269,263     26,389,836 45%
Amounts on a per unit basis            
FFO 0.0092 0.0086     0.0008 9%
Recurring FFO  0.0091 0.0086     0.0005 6%
AFFO 0.0092 0.0084     0.0008 9%
Distributions 0.0050 0.0045     0.0005 10%
         
(1) Non-IFRS financial measures
(2) Includes value of investment properties owned through joint ventures 
(3) Excludes convertible debentures and exchangeable preferred units

 
RECONCILIATION OF NET INCOME TO FFO
  3 months      
Periods ended March 31 2018 2017     Change
Net income attributable          
to unitholders 1,373,354 1,840,152     (466,798)
Change in value of investment properties (674,827) (1,334,751)     659,924
Change in value of investment          
properties in joint ventures 60,489 (31,140)     91,629
Unit based compensation 41,080 28,475     12,605
Change in liability component of          
exch. preferred units & debentures 4,133 14,352     (10,219)
Change in fair value of derivative          
financial instruments (12,180) (7,975)     (4,205)
Income taxes    
FFO(1) – basic 792,049 509,113     56%
FFO per unit – basic 0.0092 0.0086     8%
Distributions paid on exchangeable          
units (if dilutive) 13,897     (13,897)
FFO – diluted 792,049 523,010     51%
FFO per unit – diluted 0.0092 0.0083     11%
Recurring FFO – basic 777,049 509,113     53%
Recurring FFO per unit – basic 0.0091 0.0086     6%
Distributions 431,785 266,847     164,938
Distributions per unit 0.0050 0.0045     12%
FFO – basic after distributions 0.0042 0.0041     0.0001
Recurring FFO – basic after distributions 0.0040 0.0041     (0.0001)
Distributions as a % of          
FFO – basic 55% 52%     3%
Distributions as a % of          
Recurring FFO – basic 56% 52%     4%
Weighted avg. units o/s          
Basic 85,659,099 59,269,263     26,389,836
Diluted 86,240,494 62,938,858     23,301,636
           
(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 March 31th, 2018 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.