Fronsac Real Estate Investment Trust
TSX VENTURE : GAZ.UN

Fronsac Real Estate Investment Trust

August 24, 2017 18:15 ET

Fronsac REIT Announces Continuous Growth for the Quarter Ended June 30th, 2017 and the September 29th, 2017 Regular Quarterly Distribution

MONTREAL, QUEBEC--(Marketwired - Aug. 24, 2017) - Fronsac Real Estate Investment Trust ("Fronsac REIT" or "Fronsac") (TSX VENTURE:GAZ.UN) today announced its results for the quarter ended June 30th, 2017 and a distribution of 0.45¢ per unit to unitholders of record on September 15th, 2017 and payable on September 29th, 2017.

For the quarter ended June 30th, 2017, Fronsac reported recurring funds from operations ("Recurring FFO") per unit of 0.78¢ compared to 0.57¢ per unit for the quarter ended June 30th, 2016, an increase of 37%. Recurring FFO was $498,628, an increase of 88% ($264,628 in Q2 2016). During Q2 2017 the Trust's property rental income was $976,412 compared to $646,806 in Q2 2016, an increase of 51%. NOI (Net operating Income) was $802,897 compared to $557,306 in Q2 2016, an increase of 44%. Fronsac recorded a net income attributable to unitholders of $322,928, or 0.5¢ per unit, compared to net loss of $485,256, or 1.05¢ per unit, in Q2 2016.

For the six months ended June 30th, 2017, Fronsac reported recurring funds from operations ("Recurring FFO") per unit of 1.63¢ compared to 1.15¢ per unit for the period ended June 30th, 2016, an increase of 42%. Recurring FFO was $1,007,743, an increase of 89% ($532,865 in Q2 2016). During Q2 2017 the Trust's property rental income was $1,946,047 compared to $1,248,546 in Q2 2016, an increase of 56%. NOI (Net operating Income) was $1,584,028 compared to $1,219,775 in Q2 2016, an increase of 30%. Fronsac recorded a net income attributable to unitholders of $2,163,081, or 3.5¢ per unit, compared to net income of $1,043,376, or 2.25¢ per unit, in Q2 2016.

Jason Parravano President and CEO said: "Q2 was another quarter of continuous growth for Fronsac. We are extremely proud to have completed our 2nd $5M round of financing in the last 12 months. We managed to put a portion of the money raised to work quickly with the acquisition of 2 properties in St-Eustache as well as the acquisition in Waterloo. In addition we are pleased to announce the construction of a joint venture development in Quebec City."

The tables below represent other financial highlights as well as the reconciliation from net income to FFO for the periods ended June 30th, 2017 and its comparative period. This information should be read in conjunction with the Consolidated Financials Statements and MD&A for the quarters ended June 30th, 2017 and June 30th, 2016.

SUMMARY OF SELECTED ANNUAL INFORMATION
6 months
Periods ended June 30 2017 2016 Change %
Financial info
Property rental income 1,946,047 1,248,546 697,501 56 %
Total revenue 1,956,047 1,403,896 552,151 39 %
NOI (1) 1,584,028 1,219,775 364,253 30 %
FFO (1)(4) 1,017,743 688,215 329,528 48 %
Recurring FFO (1)(4) 1,007,743 532,865 474,878 89 %
AFFO (1) 974,809 654,376 320,433 49 %
EBITDA (1) 1,376,145 1,004,929 371,216 37 %
Investment properties (2) 53,416,627 34,173,569 19,243,058 56 %
Total assets 53,493,834 34,449,189 19,044,645 55 %
Total mortgage/loans/long term debt (3) 23,114,063 17,592,674 5,521,389 31 %
Total exchangeable preferred units 966,551 926,027 40,524 4 %
Total convertible debentures 249,854 248,468 1,386 1 %
Total equity 27,638,975 14,837,658 12,801,317 86 %
Weighted average units o/s - basic 61,764,896 46,398,806 15,366,090 33 %
Amounts on a per unit basis
FFO 0.0165 0.0148 0.0017 12 %
Recurring FFO 0.0163 0.0115 0.0048 42 %
AFFO 0.0158 0.0141 0.0017 12 %
Distributions 0.0090 0.0080 0.0010 12 %
(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 includes 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 Q1 2016
RECONCILIATION OF NET INCOME TO FFO
3 months 6 months
Periods ended June 30 2017 2016 Change 2017 2016 Change
Net income (loss) attributable to unitholders 322,928 (485,256 ) 808,184 2,163,081 1,043,376 1,119,705
Change in value of investment properties (89,172 ) 613,020 (702,192 ) (1,423,922 ) (477,164 ) (946,758 )
Change in value of investment properties in joint ventures (110,501 ) 27,984 (138,485 ) (141,641 ) - (141,641 )
Unit based compensation 39,550 41,075 (1,525 ) 68,025 41,075 26,950
Change in liability component of exchangeable preferred units 7,074 6,143 931 21,426 19,586 1,840
Change in fair value of derivative financial instruments 300,794 61,150 239,644 294,614 56,235 238,379
Change in fair value of other financial components 37,955 5,640 32,315 36,160 4,885 31,275
Income taxes - 222 222 - 222 (222 )
FFO(1) - basic 508,628 269,978 88 % 1,017,743 688,215 48 %
FFO per unit - basic 0.0079 0.0058 36 % 0.0165 0.0148 11 %
Distributions paid on exchangeable
units (if dilutive) 13,897 12,584 1,313 35,294 32,051 3,243
FFO - diluted 522,525 282,562 85 % 1,053,037 720,266 46 %
FFO per unit - diluted 0.0078 0.0057 36 % 0.0162 0.0146 12 %
Recurring FFO - basic 498,628 264,628 88 % 1,007,743 532,865 89 %
Recurring FFO per unit - basic 0.0078 0.0057 36 % 0.0163 0.0115 42 %
Distributions 312,765 189,197 123,568 579,612 368,915 210,697
Distributions per unit 0.0045 0.0041 10 % 0.0090 0.0080 13 %
FFO - basic after distributions 0.0034 0.0017 0.0017 0.0075 0.0069 0.0006
Recurring FFO - basic after distribution 0.0033 0.0016 0.0016 0.0073 0.0035 0.0038
Distributions as a % of FFO - basic 57 % 70 % (13 %) 55 % 54 % 1 %
Distributions as a % of Recurring FFO - basic 58 % 71 % (14 %) 55 % 69 % (14 %)
Weighted avg. units o/s
Basic 64,233,104 46,418,861 17,814,243 61,764,896 46,398,806 15,366,090
Diluted 67,321,304 49,507,061 17,814,243 64,853,096 49,487,006 15,366,090
(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 commercial real estate properties situated along highways or frequently travelled routes, rented to strong tenants under long term, management free and net leases.

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 June 30th, 2017 financial statements and management discussion & analysis of Fronsac REIT may be viewed on SEDAR at www.sedar.com

Contact Information

  • Jason Parravano
    (450) 536-5328