Cagim Real Estate Corporation
TSX VENTURE : CIM

Cagim Real Estate Corporation

May 29, 2009 11:48 ET

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

QUEBEC, CANADA--(Marketwire - May 29, 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 first quarter ended March 31, 2009.

Highlights :

- Growth in operating revenues of 8.4%;

- Increase in net operating income of 17.2%;

- Increase in income from real estate activities of 63%;

- Growth in income from operations of 134.7% (before variation in non-cash working capital);

- Decrease in net loss of 48%, now amounting to $54,266;

- Receipt of first disbursements on the conditional interim construction financing for the Complexe Lebourgneuf, a building of over 215,000 square feet;

- Occupancy rates of income properties rose 3.8% compared to the rate of the correspondent quarter of the previous year, reaching 88.9%. Had it not been for the recent expansion of Edifice Centre d'Affaires Le Mesnil that is temporarily affecting the occupancy rates, the rate would have increased an additional 2%, to reach 90.9%.

Events subsequent to March 31, 2009:

- Renewal of a loan expired in April 2009 for which the balance was $822,496;

- Securing a 2nd rank loan of $1 million on Edifice Centre d'Affaires Le Mesnil.

Selected Financial Information :



For the three month period ended March 31 2009 2008 Variation %
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Operating revenues 1,083,578 999,756 8.4
Net operating income (NOI)(1) 435,090 371,379 17.2
Income from real estate activities(1) 214,685 131,679 83.5
Income from operations(2) 125,935 53,647 134.7
Net loss (54 266) (98,312) (44.8)
Occupancy rate of income properties 88.9% 86.1% 3.8
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(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 first 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 first 2009 quarter, operating revenues totalled $1,083,578 compared to $999,756 in the first quarter of 2008, representing an 8.4% increase. The change in operating revenues between the periods is due primarily to the increase in the occupancy rate, mainly for Place d'Affaires Lebourgneuf Phase 2. The remaining increase is related to the renewal of leases that have expired between the two periods at a higher price.

Net operating income

Net operating income was $435,090 for the three month period ended March 31, 2009 compared to $371,379 for the corresponding period in 2008. This represents an increase of 17.2% which is greater than the income growth because the operating expenses were up only 3.2%, while revenues were up 8.4%. Consequently, the net operating margin rose from 37.1% in the first quarter of 2008 to 40.2% in 2009.

Income from real estate activities

Income from real estate activities has undergone a significant increase of $83,006, an improvement of 83.5%, which is higher than the increase in net operating income. This is due to the fact that financing costs are down $19,296.
Net loss

Net loss decreased by 44.8%, reaching $54,266. More importantly, income from operations before variation in non-cash working capital increased by 134.7%, up from $72,288 to $125,935.

Occupancy rate of income properties

The occupancy rate of our income properties has rose significantly in the first quarter of 2009, going from 86.1% at March 31, 2008 to 89.8% at March 31, 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 rented, the occupancy rate would have been 90.8%. Furthermore, between these two periods, we signed for over 100,000 square feet worth of leases in the building under construction, Complexe Lebourgneuf, without having it affect the occupancy rate of existing real estate portfolio of the Corporation, even if these buildings were located in the same Quebec region as Complexe Lebourgneuf.

Property under development

As of today, Complexe Lebourgneuf, the building under construction at March 31, 2009, is already leased at more than 48%. First occupants of this building of 215,000 square-feet will arrive in the third quarter of 2009 and net revenues related to signed lease agreements already exceed the amount required to service the debt.

Events subsequent to March 31, 2009

In April 2009, the Corporation renewed a hypothecary loan with a balance of $822,496 that expired during that month. The term of this effect is due one year and comes with an annual interest rate of 6%.

In May 2009, the Corporation closed a 2nd rank hypothecary loan for the amount of $1,000,000 for Edifice Centre d'Affaires Le Mesnil. The hypothec provides a four (4) year term, a capital payable at maturity of the term in May 2013, and a 9% per annum interest rate payable by monthly instalments. This arm's length financing was set up to defray the costs of expansion of the leasable area of the aforementioned building, as well as the cost of the leasehold improvements for a leased premises of over 16,500 square feet in Edifice Centre d'Affaires Le Mesnil for the Ministry of Transport, which occupies the leased premises since February 1, 2009.

The fact that the Corporation secured these two financings in the current economic environment shows the lenders' confidence towards the Corporation.

Financial measures not in compliance with Canadian GAAP

Net operating income and income from real estate activities are not measures defined by the GAAP, but they are useful measures to evaluate the performance of the Corporation 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 table which reconciles these measures to the most similar GAAP measures.



2009 2008
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Net loss (54,266) (98,313)

Taxes and capital taxes (13,880) (10,707)
Costs related to market entry 58,844 45,142
Administrative costs 43,126 36,811
Amortization 198,461 188,663
Financial revenues (17,600) (29,918)
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Income from real estate activities 214,685 131,678

Financing costs 220,405 239,701

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Net operating income 435,090 371,379
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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 by 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.

The TSX Venture Exchange does not accept responsibility for the adequacy 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
    Chief Executive Officer
    418-622-6644