Canadian Net REIT Announces Its Results for the Quarter and Year Ended December 31, 2021, and Q2 2022 Monthly Distributions
MONTRÉAL, March 23, 2022 (GLOBE NEWSWIRE) — (TSX-V: NET.UN) Canadian Net Real Estate Investment Trust (“Canadian Net” or the “Trust”) announces its results for the quarter and the year ended December 31st, 2021, and monthly distributions for the months of April, May and June 2022.
RESULTS
For the quarter ended December 31st, 2021, Canadian Net reported recurring funds from operations (“Recurring FFO”) per unit of $0.147 compared to $0.125 per unit for the quarter ended December 31st, 2020, an increase of 18%. Recurring FFO was $2,971,560, an increase of 50% relative to $1,977,869 in Q4 2020. The increase was primarily due to the impact of the newly acquired properties, partially offset by interest on mortgages associated with said properties.
During Q4 2021, the Trust’s property rental income was $4,932,753 compared to $3,690,482 in Q4 2020, an increase of 34%. Net Operating Income was $3,904,277 compared to $2,742,292 in Q4 2020, an increase of 42%. The increases were primarily due to the impact of the newly acquired properties.
Canadian Net recorded a net income attributable to unitholders of $7,453,246, or $0.369 per unit, compared to $847,652, or $0.054 per unit in Q4 2020. The positive variance was primarily due to the impact of NOI from newly acquired properties, partially offset by interest on mortgages associated with said properties, as well as the change in fair value of investment properties.
For the twelve-month period ended December 31st, 2021, Canadian Net reported Recurring FFO per unit of $0.582 compared to $0.487 per unit for the comparable period in 2020, an increase of 20%. Recurring FFO was $10,819,566, an increase of 52% relative to $7,117,442 for the same period in 2020. The increase was primarily due to the impact of the newly acquired properties, partially offset by interest on mortgages associated with said properties.
During the 12-month period ended December 31st, 2021, the Trust’s property rental income was $18,953,524 compared to $12,976,848 for the same period in 2020, an increase of 46%. Net operating Income was $14,321,735 compared to $9,869,068 for the same period in 2020, an increase of 45%. The increases were primarily due to the impact of the newly acquired properties.
Canadian Net recorded a net income attributable to unitholders of $25,090,167, or $1.351 per unit, compared to a net income of $9,621,177, or $0.658 per unit for the same period in 2020. The positive variance was primarily due to the impact of NOI from newly acquired properties, partially offset by interest on mortgages associated with said properties, as well as the change in fair value of investment properties.
DISTRIBUTIONS
Canadian Net announces that it will make monthly cash distributions of $0.0283 per unit, representing $0.34 per unit on an annualized basis, on April 29th, May 31st and June 30th, 2022, to unitholders of record on April 14th, May 13th and June 15th, 2022, respectively.
Jason Parravano, President and CEO says: “It is my pleasure to share with you our annual results for 2021. We once again grew the portfolio while staying focused on delivering per unit growth. 2021 was filled with many accomplishments, such as continued portfolio diversification, a successful equity raise and the announcement of our 11th consecutive distribution increase for 2022. We look forward to sharing our progress with you as we continue into 2022.”
The tables below represent other financial highlights as well as the reconciliation from net income to FFO for the periods ended December 31st, 2021, and its comparative period. This information should be read in conjunction with the Audited Consolidated Financial Statements and MD&A for the quarter ended December 31st, 2021 and Audited Consolidated Financial Statements and MD&A for the quarter ended December 31st, 2020.
SUMMARY OF SELECTED FINANCIAL INFORMATION
| 12 months | ||||||
| Periods ended December 31 | 2021 | 2020 | Δ | % | ||
| Financial info | ||||||
| Property rental income | 18,953,524 | 12,976,848 | 5,976,676 | 46 | % | |
| Total revenue | 18,953,524 | 12,987,262 | 5,966,262 | 46 | % | |
| Net income and | ||||||
| comprehensive income | 25,090,167 | 9,621,177 | 15,468,990 | 161 | % | |
| NOI (1) | 14,321,735 | 9,869,068 | 4,452,667 | 45 | % | |
| FFO (1) | 10,791,751 | 7,127,856 | 3,663,895 | 51 | % | |
| Recurring FFO (1)(2) | 10,819,566 | 7,117,442 | 3,702,124 | 52 | % | |
| AFFO (1) | 10,033,624 | 6,562,370 | 3,471,254 | 53 | % | |
| EBITDA | 29,646,790 | 12,641,196 | 17,005,594 | 135 | % | |
| Adjusted EBITDA (1) | 14,946,751 | 9,918,347 | 5,028,404 | 51 | % | |
| Investment properties | 252,947,654 | 185,991,100 | 66,956,554 | 36 | % | |
| Adjusted investment properties (3) | 298,465,593 | 221,711,905 | 76,753,688 | 35 | % | |
| Total assets | 278,165,686 | 209,705,999 | 68,459,687 | 33 | % | |
| Total mortgage/loans/long term debt (4) | 133,405,859 | 107,652,001 | 25,753,858 | 24 | % | |
| (including revolving line of credit) | 136,290,859 | 107,652,001 | 28,638,858 | 27 | % | |
| Total convertible debentures | 8,416,510 | 8,134,379 | 282,131 | 3 | % | |
| Total equity | 129,814,467 | 90,206,351 | 39,608,116 | 44 | % | |
| Weighted average units o/s – basic | 18,575,569 | 14,628,913 | 3,946,656 | 27 | % | |
| Amounts on a per unit basis | ||||||
| FFO | 0.581 | 0.487 | 0.094 | 19 | % | |
| Recurring FFO | 0.582 | 0.487 | 0.096 | 20 | % | |
| AFFO | 0.540 | 0.449 | 0.092 | 20 | % | |
| Distributions | 0.300 | 0.256 | 0.045 | 17 | % | |
| (1) See appropriate sections for reconciliation to the closest IFRS measure and section “Explanation of non-IFRS financial measures” | ||||||
| (2) Recurring FFO excludes ”Other revenues” as presented on the Consolidated Financial Statements | ||||||
| (3) Adjusted Investment Properties includes the Trust’s proportionate share of value of investment properties owned through joint ventures; Refer to Note 4 Properties) and Note 5 ([1] value of developed properties, [2] leased properties and [3] properties under development) in Canadian Net’s financial statements | ||||||
| (4) Excludes convertible debentures | ||||||
RECONCILIATION OF NET INCOME TO FFO
| 3 months | 12 months | ||||||||||||
| Periods ended December 31 | 2021 | 2020 | Δ | 2021 | 2020 | Δ | |||||||
| Net income attributable | |||||||||||||
| to unitholders | 7,453,246 | 847,652 | 6,605,594 | 25,090,167 | 9,621,177 | 15,468,990 | |||||||
| Δ in value of investment properties | (3,354,091 | ) | 1,951,657 | (5,305,748 | ) | (13,356,401 | ) | (309,372 | ) | (13,047,029 | ) | ||
| Δ in value of investment | |||||||||||||
| properties in joint ventures | (642,015 | ) | (513,351 | ) | (128,664 | ) | (1,258,966 | ) | (1,512,138 | ) | 253,172 | ||
| Unit based compensation | 49 | (912 | ) | 961 | 308,595 | 37,492 | 271,103 | ||||||
| Δ fair value adjustments on derivative | |||||||||||||
| financial instruments | (564,707 | ) | (337,544 | ) | (227,163 | ) | (91,487 | ) | (939,825 | ) | 848,338 | ||
| Accretion of lease payments | 7,383 | 6,991 | 392 | 28,936 | 27,405 | 1,531 | |||||||
| Income taxes | 154,868 | 23,500 | 131,368 | 154,080 | 23,117 | 130,963 | |||||||
| Realized (gain) loss on sale of | |||||||||||||
| investment properties | (57,674 | ) | – | (57,674 | ) | (57,674 | ) | 180,000 | (237,674 | ) | |||
| Realized (gain) loss on sale of investment | |||||||||||||
| properties in joint ventures | (25,499 | ) | – | (25,499 | ) | (25,499 | ) | – | (25,499 | ) | |||
| FFO(1) | 2,971,560 | 1,977,993 | 50 | % | 10,791,751 | 7,127,856 | 51 | % | |||||
| FFO per unit | 0.147 | 0.125 | 18 | % | 0.581 | 0.487 | 19 | % | |||||
| Other (revenues) expenses | – | (124 | ) | – | 27,815 | (10,414 | ) | 38,229 | |||||
| Recurring FFO(1) | 2,971,560 | 1,977,869 | 50 | % | 10,819,566 | 7,117,442 | 52 | % | |||||
| Recurring FFO per unit | 0.147 | 0.125 | 18 | % | 0.582 | 0.487 | 20 | % | |||||
| Distributions | 1,513,944 | 998,731 | 515,213 | 5,577,658 | 3,754,484 | 1,823,174 | |||||||
| Distributions per unit | 0.075 | 0.064 | 17 | % | 0.300 | 0.256 | 17 | % | |||||
| FFO per unit – after distributions | 0.072 | 0.061 | 18 | % | 0.281 | 0.232 | 21 | % | |||||
| Recurring FFO per unit – after distributions | 0.072 | 0.061 | 18 | % | 0.282 | 0.231 | 22 | % | |||||
| Distributions per unit as a % of | |||||||||||||
| FFO per unit | 51 | % | 51 | % | – | 52 | % | 52 | % | – | |||
| Recurring FFO per unit | 51 | % | 51 | % | – | 52 | % | 53 | % | (1 | %) | ||
| Weighted avg. units o/s | |||||||||||||
| Basic | 20,193,078 | 15,794,450 | 4,398,628 | 18,575,569 | 14,628,913 | 3,946,656 | |||||||
| (1) See appropriate sections for reconciliation to the closest IFRS measure and section “Explanation of non-IFRS financial measures” | |||||||||||||
About Canadian Net – Canadian Net 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. Canadian Net 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 IFRS standards, as well as other risks and factors described from time to time in the documents filed by Canadian Net with securities regulators, including the management report. Canadian Net 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 December 31st, 2021, financial statements and management discussion & analysis of Canadian Net may be viewed on SEDAR at www.sedar.com.
For further information please contact Jason Parravano at (450) 536-5328.
