Canadian Net REIT Announces Its Results for the Quarter Ended March 31, 2022, and Q3 2022 Monthly Distributions
MONTRÉAL, May 25, 2022 (GLOBE NEWSWIRE) — (TSX-V: NET.UN) Canadian Net Real Estate Investment Trust (“Canadian Net” or the “Trust”) announces its results for the quarter ended March 31st, 2022, and monthly distributions for the months of July, August, and September 2022.
RESULTS
For the quarter ended March 31st, 2022, Canadian Net reported funds from operations per unit1 (“FFO per unit”) of $0.151 compared to $0.140 per unit for the quarter ended March 31st, 2021, an increase of 8%. Funds from Operations1 (“FFO”) was $3,070,278, an increase of 26% relative to $2,433,267 in Q1 2021. The increase was primarily due to the impact of the newly acquired properties, partially offset by interest on mortgages associated with said properties.
During Q1 2022, the Trust’s property rental income was $5,431,695 compared to $4,453,791 in Q1 2021, an increase of 22%. Net Operating Income1 (“NOI”) was $4,207,759 compared to $3,279,414 in Q1 2021, an increase of 28%. The increases were primarily due to the impact of the newly acquired properties.
Canadian Net also recorded a net income attributable to unitholders of $1,480,986 compared to $223,673 in Q1 2021. The positive variance was primarily due to the impact of NOI1 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 July 29th, August 31st, and September 30th, 2022, to unitholders of record on July 15th, August 15th, and September 15th, 2022, respectively.
Jason Parravano, President and CEO says: “I am pleased to once again share with you another quarter of per unit FFO1 growth. 2022 is off to another great start, having already purchased 9 properties since the beginning of the year and continuing to grow the portfolio.”
The tables below represent other financial highlights as well as the reconciliations of certain non-IFRS measures for the periods ended March 31st, 2022, and its comparative period. This information should be read in conjunction with the Consolidated Financial Statements and MD&A for the quarter ended March 31st, 2022, and the Consolidated Financial Statements and MD&A for the quarter ended March 31st, 2021.
SUMMARY OF SELECTED FINANCIAL INFORMATION
| 3 months | |||||||
| Periods ended March 31 | 2022 | 2021 | Δ | % | |||
| Financial info | |||||||
| Property rental income | 5,431,695 | 4,453,791 | 977,904 | 22 | % | ||
| Net income and comprehensive income | 1,480,986 | 223,673 | 1,257,313 | 562 | % | ||
| NOI (1) | 4,207,759 | 3,279,414 | 928,345 | 28 | % | ||
| FFO (1) | 3,070,278 | 2,433,267 | 637,011 | 26 | % | ||
| AFFO (1) | 2,923,746 | 2,236,544 | 687,202 | 31 | % | ||
| Investment properties | 267,390,147 | 187,591,316 | 79,798,831 | 43 | % | ||
| Adjusted investment properties (1) | 314,071,396 | 225,561,827 | 88,509,569 | 39 | % | ||
| Total assets | 293,285,225 | 208,549,407 | 84,735,818 | 41 | % | ||
| Mortgages | 128,636,709 | 97,813,717 | 30,822,992 | 32 | % | ||
| Long-term debt | 60,000 | 75,000 | (15,000 | ) | (20 | %) | |
| Current portion of mortgages and long term-debt | 14,396,253 | 8,970,774 | 5,425,479 | 60 | % | ||
| Credit facilities | 6,115,000 | 1,050,000 | 5,065,000 | 482 | % | ||
| Total convertible debentures | 8,332,811 | 8,128,852 | 203,959 | 3 | % | ||
| Total equity | 131,130,975 | 89,408,345 | 41,722,630 | 47 | % | ||
| Weighted average units o/s – basic | 20,320,019 | 17,420,614 | 2,899,405 | 17 | % | ||
| Amounts on a per unit basis | |||||||
| FFO(1) | 0.151 | 0.140 | 0.011 | 8 | % | ||
| AFFO(1) | 0.144 | 0.128 | 0.016 | 12 | % | ||
| Distributions | 0.085 | 0.075 | 0.010 | 13 | % | ||
| (1) This is a non-IFRS financial measure that does not have any standardized IFRS meaning and as such may not be comparable to other issuers. Refer to section “Non-IFRS financial measures”. | |||||||
ADJUSTED INVESTMENT PROPERTIES
| As at March 31 | 2022 | 2021 | Δ | |
| Investment Properties | ||||
| Developed properties | 267,390,147 | 187,591,316 | 43 | % |
| 267,390,147 | 187,591,316 | 43 | % | |
| Joint Venture Ownership(1) | ||||
| Developed properties | 43,776,289 | 35,035,830 | 25 | % |
| Properties under development | 2,904,960 | 2,934,681 | (1 | %) |
| Adjusted Investment Properties(2) | 314,071,396 | 225,561,827 | 39 | % |
| (1) Represents Canadian Net’s proportionate share | ||||
| (2) This is a non-IFRS financial measure that does not have any standardized IFRS meaning and as such may not be comparable to other issuers. Refer to section “Non-IFRS financial measures” | ||||
RESULTS OF OPERATIONS
| 3 months | |||||||
| Periods ended March 31 | 2022 | 2021 | Δ | ||||
| Rental Income | 5,431,695 | 4,453,791 | 977,904 | ||||
| Operating costs | (1,223,936 | ) | (1,174,377 | ) | (49,559 | ) | |
| Net Operating Income(1) | 4,207,759 | 3,279,414 | 928,345 | ||||
| Share of net income (loss) from investments in joint ventures | 1,056,100 | (801,624 | ) | 1,857,724 | |||
| Increase/(decrease) in fair values of investment properties | (1,491,410 | ) | (1,450,766 | ) | (40,644 | ) | |
| Financial expenses | 1,668,936 | 298,748 | 1,370,188 | ||||
| Administrative expenses | 237,279 | 205,432 | 31,847 | ||||
| Unit-based compensation | 385,248 | 299,171 | 86,077 | ||||
| Net income and comprehensive income | 1,480,986 | 223,673 | 1,257,313 | ||||
| FFO(1) | 3,070,278 | 2,433,267 | 26 | % | |||
| FFO per unit(1) | 0.151 | 0.140 | 8 | % | |||
| Weighted avg. units o/s | |||||||
| Basic | 20,320,019 | 17,420,614 | 2,899,405 | ||||
| (1) This is a non-IFRS financial measure that does not have any standardized IFRS meaning and as such may not be comparable to other issuers. Refer to section “Non-IFRS financial measures” | |||||||
FUNDS FROM OPERATIONS
| 3 months | ||||||
| Periods ended March 31 | 2022 | 2021 | Δ | |||
| Net income attributable to unitholders | 1,480,986 | 223,673 | 1,257,313 | |||
| Δ in value of investment properties | 1,491,410 | 1,450,766 | 40,644 | |||
| Δ in value of investment properties in joint ventures | (633,855 | ) | 1,165,947 | (1,799,802 | ) | |
| Unit-based compensation | 385,248 | 299,171 | 86,077 | |||
| Δ fair value adjustments on derivative financial instruments | 339,006 | (713,377 | ) | 1,052,383 | ||
| Accretion of lease payments | 7,483 | 7,087 | 396 | |||
| FFO(1) | 3,070,278 | 2,433,267 | 26 | % | ||
| FFO per unit(1) | 0.151 | 0.140 | 8 | % | ||
| Distributions | 1,724,930 | 1,307,150 | 417,780 | |||
| Distributions per unit | 0.085 | 0.075 | 13 | % | ||
| FFO per unit(1) – after distributions | 0.066 | 0.065 | 2 | % | ||
| Distributions per unit as a % of FFO per unit(1) | 56 | % | 54 | % | 2 | % |
| Weighted avg. units o/s | ||||||
| Basic | 20,320,019 | 17,420,614 | 2,899,405 | |||
| (1) This is a non-IFRS financial measure that does not have any standardized IFRS meaning and as such may not be comparable to other issuers. Refer to section “Non-IFRS financial measures” | ||||||
ADJUSTED FUNDS FROM OPERATIONS
| 3 months | ||||||
| Periods ended March 31 | 2022 | 2021 | Δ | |||
| FFO (1) | 3,070,278 | 2,433,267 | 637,011 | |||
| Amortization of finance charges included in interest expense | – | – | – | |||
| Straight-line rent adjustment(2) | (117,820 | ) | (148,290 | ) | 30,470 | |
| Maintenance/cap-ex on existing properties | (28,712 | ) | (48,433 | ) | 19,721 | |
| Leasing costs on existing properties | – | – | – | |||
| Debt extinguishment penalties | – | – | – | |||
| AFFO(1) | 2,923,746 | 2,236,544 | 31 | % | ||
| AFFO per unit(1) | 0.144 | 0.128 | 12 | % | ||
| Distributions per unit | 0.085 | 0.075 | 13 | % | ||
| AFFO per unit(1) – after distributions | 0.059 | 0.053 | 11 | % | ||
| Distributions per unit(1) as a % of AFFO per unit(1) | 59 | % | 58 | % | 1 | % |
| Weighted avg. units o/s | ||||||
| Basic | 20,320,019 | 17,420,614 | 2,899,405 | |||
| (1) This is a non-IFRS financial measure that does not have any standardized IFRS meaning and as such may not be comparable to other issuers. Refer to section “Non-IFRS financial measures” | ||||||
| (2) Adjusted for proportionate share of equity accounted investments | ||||||
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.
Non-IFRS Financial Measures – The Trust’s consolidated financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”). In this press release, as a complement to results provided in accordance with IFRS, the Trust discloses and discusses certain non-IFRS financial measures: FFO, FFO per unit, AFFO, AFFO per unit, NOI, and Adjusted Investment Properties. These non-IFRS measures are not defined by IFRS, do not have a standardized meaning, and may not be comparable with similar measures presented by other issuers. Canadian Net has presented such non-IFRS measures as management of the Trust believes they are relevant measures of Canadian Net’s underlying operating performance and debt management. Non-IFRS measures should not be considered as alternatives to net income, cash generated from (utilized in) operating activities, or comparable metrics determined in accordance with IFRS as indicators of the Trust’s performance, liquidity, cash flow, and profitability. For a full description of these measures and, where applicable, a reconciliation to the most directly comparable measure calculated in accordance with IFRS, please refer to the “Non-IFRS Financial Measures ” section in Canadian Net’s management’s discussion and analysis for the three-month period ended March 31, 2022, available under Canadian Net’s profile on SEDAR at www.sedar.com.
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 Provider) accepts any responsibility for the adequacy or accuracy of this release.
The March 31st, 2022, 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.
1 This is a non-IFRS financial measure that does not have any standardized IFRS meaning and as such may not be comparable to other issuers. Refer to section “Non-IFRS Financial Measures”.
