Cagim Real Estate Corporation
TSX VENTURE : CIM

Cagim Real Estate Corporation

November 27, 2009 17:00 ET

Cagim Announces Increase in Results for Second Quarter of Fiscal Year 2009

QUEBEC, CANADA--(Marketwire - Nov. 27, 2009) - Cagim Real Estate Corporation (TSX VENTURE:CIM) (the "Corporation") a real estate management and acquisition corporation, is pleased to announce its financial results for the third quarter ended September 30, 2009.

Highlights :

  • Growth in operation revenues of 19.5% for the third quarter, 13.6% for the first nine months.
  • Increase in net operating income (NOI) of 27.6% for the third quarter, 26.4% for the first nine months.
  • Increase in income from real estate activities of 48.3% for the third quarter, 58.7% for the first nine months.
  • Growth in fund from operations (FFO) of 24.5% (before variation in non-cash working capital) for the third quarter, 35.4% for the first nine months.
  • Net income of $1,966 in the third quarter compared to a loss of $16,133 for the corresponding period in 2008, loss of $46,074 for the first nine months compared to a loss of $147,493 in 2008.
  • Continued construction of Complexe Lebourgneuf, a building of over 235,000 square feet. Cagim owns 50% of this project through one of its subsidiaries.
  • 1.5% increase in the occupancy rate over September 30, 2008. Had it not been for the recent expansion of Edifice Centre d'Affaires Le Mesnil, which is not yet leased, the increase would have been 3.3%, and all buildings would have seen their occupancy rates rise.
  • Issuing of $1,400,000 convertible debentures, bearing an interest rate of 9% per annum. The last portion of $250,000 was disbursed November 8, 2009.

Subsequents events :

  • The Corporation became co-owner of commercial land located in Quebec City's Lebourgneuf district.
  • The Corporation acquired 100% of shares of Societe Immobiliere Albatros, which holds as its principal asset a commercial building located in St-Augustin-de-Desmaures, Quebec. The building enjoys full occupancy with 15 years remaining in the lease agreement.
  • The Corporation issued 1,400,000 Class A shares at a price of $0.50 per share, in conjunction with the acquisition of Societe Immobiliere Albatros.

Selected Financial Information :

For the three month period ended September 30 20092008Variation %
Operating revenues 993,304831,18019.5
Net operating income (NOI) (1) 590,274462,53327.6
Income from real estate activities (1)345,001232,57148.3
Fund from operations (FFO) (2)219,349176,18724.5
Net income (net loss)  1,966  (16,133)N/A
Occupancy rate of income properties90.3%88.8%1,5
(1)Net operating income (NOI) and income from real estate activities are not measures of performance in compliance with Canadian GAAP but are measures commonly used in the real estate sector.
(2)Before variation in non-cash working capital.

A third quarter marked by growth despite the current economic environment. The growth is due to higher occupancy rates of income properties, primarily Place d'Affaires Lebourgneuf, Phase 2.

Management Discussion and Analysis of Financial Position and Results of Operations

Operating revenues

During the third quarter of 2009, operating revenues totalled $993,304 compared to $831,180 in the third quarter of 2008, representing a 19.5% increase. The change in operating revenues between the periods is primarily due to increase in the occupancy rate of income properties. For the nine-month period ended September 30, 2009, growth was up 13.6% over the first nine months of 2008.

Net Operating Income (NOI)

Net operating income totalled $590,274 for the third quarter ended September 30, 2009, compared to $462,533 in 2008. This represents an increase of 27.6% over the same period in 2008, which is higher than the operating revenues because the operating expenses increased only 9.4% compared to an increase of 19.5% for the operating revenues. Consequently, the net operating margin rose from 55.6% in the third quarter of 2008 to 59.4% in 2009. The increase stands at 26.4% for the first nine months of the year.

Income from real estate activities

Operating income from real estate activities increased by $112,430, namely 48.3%, during the third quarter of 2009, compared to the same quarter last year. This translated into a 58.7% rise for the first nine months of 2009 to $930,109.

Net income

For the quarter ended September 30, 2009, the Corporation posted a net income of $1,966, namely $0.000 per share, compared to a net loss of $16,133, namely $0.001 per share in 2008. This represents an improvement of $18,099. For the first nine months of 2009, there was a net loss of $46,074, a decrease in net loss of $101,419, which stood at $147,493 in 2008.

Occupancy rate of income properties

The occupancy rate of our income properties rose significantly in the third quarter of 2009, going from 88.8% at September 30, 2008 to 90.3% at September 30, 2009, attesting to our hard work and the vibrancy of the Quebec region, where four of our buildings are located. Had it not been for the recent expansion of Edifice Centre d'Affaires Le Mesnil that is not yet leased, the occupancy rate would have been 92.1%.

Financing

In September 2009, the Corporation issued convertible debentures that will mature in September 2011. These debentures bear interest at a rate of 9%, payable quarterly. They may be converted at a rate of $0.50 per common share until September 2010, or $0.55 per common share thereafter until maturity. Following the press release issued October 2, 2009, the Corporation confirms that the final portion of $250,000 was disbursed November 8, 2009.

Capital stock

In September 2009, following the expiry of 1,215,000 stock options granted in September 2004, the Board of Directors granted to its active members 835,000 stock options at an exercise price of $0.50 per common share, for a 5 year period, as previously issued. Moreover, an additional 850,000 stock options were granted to certain officers, directors and consultants of the Corporation, at an exercise price of $0.50 per common share, for a 5 year period.

Financial measures not in compliance with Canadian GAAP

Net operating income and income from real estate activities are not measures defined by GAAP, but they are useful measures to evaluate the Corporation's performance and are commonly used in the real estate sector. We wish to warn you that these measures have no standardized meanings and may therefore differ from a public corporation to another. That is why we provide you with the following chart which reconciles these measures to the most similar GAAP measures.

  Three month period ended September 30,  2009  2008
   
  Net income (net loss)    1,966    (16,133)
   
  Income from discontinued operations      46
  Taxes and capital taxes   7,748    15,255
  Charges related to stock market listing and shareholder communications   80,198   48,012
  Administration costs    64,472   47,832
  Amortization    195,393   184,954
  Financial revenues    (5,658)    (39,950)
   
   
  Income from real estate activities   345,001   232,571
   
  Financing costs   245,273    229,962
   
   
  Net operating income (NOI)   590,274   462,533
   
   

About Cagim Real Estate Corporation

The Corporation is listed on the TSX Venture Exchange and operates property management and acquisition activities. The Corporation operates its activities through its subsidiaries ADG Immobilier Inc. and Complexe Lebourgneuf Inc.

FORWARD-LOOKING INFORMATION – This press release contains forward-looking statements reflecting Cagim objectives, estimates, expectations and the impact of acquisitions on Cagim's financial performance. These statements are identified by the use of verbs such as "believe", "anticipate", "estimate", and "expect" as well as the use of future or conditional tenses. By their very nature, these types of statements involve risks and uncertainty. Consequently, reality may differ materially from Cagim's projections or expectations.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Cagim Real Estate Corporation
    Mr. Denis Lepine
    Chief Financial Officer
    418-622-6644
    or
    Cagim Real Estate Corporation
    Mr. Guy Boutin
    Leasing and Development Officer
    418-622-6644