Retrocom Real Estate Investment Trust

TSX : RMM.UN


Retrocom Real Estate Investment Trust

May 09, 2014 16:45 ET

Retrocom REIT Announces First Quarter 2014 Results

TORONTO, ONTARIO--(Marketwired - May 9, 2014) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR TO ANY NON-CANADIAN SOURCE

Retrocom Real Estate Investment Trust (the "REIT") (TSX:RMM.UN) today announced results for the first quarter ended March 31, 2014.

  • Net operating income ("NOI") was $15.7 million for the three months ended March 31, 2014, compared to $12.1 million for the same period in 2013, a 29.2% increase.

  • Funds from Operations, adjusted ("FFO, adjusted") was $7.6 million for the three months ended March 31, 2014, compared to $7.2 million for the same period in 2013, a 5.3% increase.

  • FFO, adjusted per unit was $0.106 per unit for the three months ended March 31, 2014, compared to $0.124 for the same period in 2013.

  • Debt to gross book value ratio (excluding convertible debentures) as at March 31, 2014 was 45.5% compared to 45.4% at December 31, 2013 and debt to gross book value ratio (including convertible debentures) as at March 31, 2014 was 54.2% compared to 53.7% at December 31, 2013.

  • Weighted average cost of mortgage debt at March 31, 2013 was 5.03%, compared to 5.21% at March 31, 2013.

  • The former Zellers space at the Orangeville Mall is partially leased to two new tenants, HomeSense and Sport Chek, and a $5 million revitalization plan to upgrade and renovate the mall has commenced.

FFO, adjusted growth in Q1 2014 was attributable to growth in our property portfolio through acquisitions completed in 2013 but was offset by the departure of Zellers Inc., higher property operating costs for utilities and snow removal and non-recurring other income of $1.0 million recorded 2013.

Richard Michaeloff, President and CEO of the REIT, said, "Q1 results reflect the integration of the properties acquired during 2013 as well as the impact as expected of the surrender of the former Zellers premises. We continue to actively pursue releasing opportunities for this space with leasing deals previously announced for Orangeville Mall marking our initial progress."

Financial Highlights
Three months ended March 31
(all amounts in $000's, except per unit amounts and ratios) 2014 2013
Rental revenue and other income 28,007 21,878
Property operating expenses 12,793 10,085
Property operating income 15,214 11,793
Share of joint venture net operating income 463 338
Net operating income (1) 15,677 12,131
Trust expenses 1,083 1,102
Finance costs - joint venture operations 208 61
Finance costs - operations 6,833 4,838
Finance costs - distributions on Class B Units 1,125 1,025
Income before fair value gains (losses) and other income 6,428 5,105
Fair value gains (losses) associated with financial instrument (6,186 ) 2,355
Fair value (losses) on investment property (711 ) (359 )
Fair value gains on participant's rights under LTIP - 32
Fair value gains on joint venture property 107 (20 )
Other income - 1,048
Income (loss) for the period (362 ) 8,161
FFO, adjusted (2) 7,582 7,203
FFO, adjusted per unit $ 0.106 $ 0.124
FFO, adjusted payout ratio 106.1 % 90.7 %
Distributions per unit $ 0.1125 $ 0.1125
Full Financial Results and MD&A will be available on SEDAR (http://www.sedar.com/) as well as the Investors Relations section of the REIT's website (http://www.rmmreit.com/).
(1) A non-IFRS measurement, calculated by the REIT as rental revenue (net rents, property tax and operating cost recoveries, as well as other miscellaneous income from tenants) less operating expenses for properties.
(2) The reconciliations from net income (loss) to Funds from Operations, adjusted are included in the REIT's MD&A.
The REIT's management considers Net Operating Income, Funds from Operations, Funds from Operations, adjusted, and Debt to Gross Book Value ratio to be indicative measures in evaluating the REIT's performance. The table above includes non-IFRS information that should not be construed as an alternative to net income or cash flows from operations and may not be comparable to similar measures presented by other issuers as there is no standardized meaning prescribed by IFRS.

Conference Call

Retrocom REIT will hold a conference call on Monday, May 12, 2014 at 11:00 am (ET). Participating on the call will be members of the REIT's senior management.

Investors are invited to access the call by dialling 416-644-3414 or 1-800-814-4859. A recording of this call will be made available Monday, May 12, 2014 beginning at 2:00 pm (ET) through to Friday, May 23, 2014. To access the recording, please call 416-640-1917 or 1-877-289-8525 and use the reservation number 4678977#.

About Retrocom REIT

Retrocom REIT is an unincorporated, open-end real estate investment trust which focuses on owning and acquiring retail properties across Canada with the goal of enhancing long-term Unitholder value.

Forward-Looking Information

This press release may contain forward-looking statements. In some cases, forward-looking statements can be identified by the use of words such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue", and by discussions of strategies that involve risks and uncertainties. The forward-looking statements are based on certain key expectations and assumptions made by the REIT. By their nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. Although management of the REIT believes that the expectations reflected in the forward-looking statements are reasonable, there can be no assurance that future results, levels of activity, performance or achievements will occur as anticipated. Neither the REIT nor any other person assumes responsibility for the accuracy and completeness of any forward-looking statements, and no one has any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or such other factors which affect this information, except as required by law.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, which may be made only by means of a prospectus, nor shall there be any sale of the Units in any state, province or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under securities laws of any such state, province or other jurisdiction. The Units of the Retrocom REIT have not been, and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered, sold or delivered in the United States absent registration or an exemption from the registration requirements of U.S. securities laws.

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