Canadian Net REIT Announces Its Results for the Quarter Ended September 30, 2021, a 13% Increase in Its Per Unit Distributions for 2022 and Q1 2022 Monthly Distributions
MONTREAL, Nov. 24, 2021 (GLOBE NEWSWIRE) — (TSX-V: NET.UN) Canadian Net Real Estate Investment Trust (“Canadian Net” or the “Trust”) announces its results for the quarter ended September 30th, 2021, an increase in its per unit distributions for a 10th consecutive year, and monthly distributions for the months of January, February and March 2022.
RESULTS
For the quarter ended September 30th, 2021, Canadian Net reported recurring funds from operations (“Recurring FFO”) per unit of $0.145 compared to $0.127 per unit for the quarter ended September 30th, 2020, an increase of 14%. Recurring FFO was $2,790,255, an increase of 50% relative to $1,864,681 in Q3 2020. During Q3 2021, the Trust’s property rental income was $4,885,412 compared to $3,219,366 in Q3 2020, an increase of 52%. Net Operating Income was $3,725,787 compared to $2,477,609 in Q3 2020, an increase of 50%. Canadian Net recorded a net income attributable to unitholders of $11,192,478, or $0.583 per unit, compared to $2,139,737, or $0.145 per unit in Q3 2020.
For the nine-month period ended September 30th, 2021, Canadian Net reported Recurring FFO per unit of $0.435 compared to $0.361 per unit for the comparable period in 2020, an increase of 21%. Recurring FFO was $7,848,006, an increase of 53% relative to $5,139,573 for the same period in 2020. During the 9-month period ended September 30th, 2021, the Trust’s property rental income was $14,020,771 compared to $9,286,366 for the same period in 2020, an increase of 51%. Net operating Income was $10,417,458 compared to $7,126,776 for the same period in 2020, an increase of 46%. Canadian Net recorded a net income attributable to unitholders of $17,636,921, or $0.978 per unit, compared to a net income of $8,773,525, or $0.616 per unit for the same period in 2020.
DISTRIBUTIONS
Starting in January 2022, the annual distribution will go from $0.30 to $0.34 per unit, representing an increase of 13.3%. With this increase, Canadian Net’s distributions have increased 172% since its first distributions in 2012, representing a compounded annual growth rate of 10.5%.
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 January 31st, February 28th and March 31st, 2022, to unitholders of record on January 14th, February 15th and March 15th, 2022, respectively.
COLLECTIONS
During Q3 2021, Canadian Net collected 100% of its rents.
Jason Parravano, President and CEO says: “Q3 marked an important milestone for the REIT as we completed our first ever bought deal equity financing which will position us for growth headed into 2022. In addition, I am proud today to announce our 10th consecutive distribution increase. This increase highlights our ability to continue to execute on not only per unit FFO growth but per unit cash flow growth, with the ultimate goal of delivering returns to our unit holders.”
The tables below represent other financial highlights as well as the reconciliation from net income to FFO for the periods ended September 30th, 2021, and its comparative period. This information should be read in conjunction with the Consolidated Financial Statements and MD&A for the quarter ended September 30th, 2021, and Consolidated Financial Statements and MD&A for the quarter ended September 30th, 2020.
SUMMARY OF SELECTED FINANCIAL INFORMATION
| 9 months | ||||||
| Periods ended September 30 | 2021 | 2020 | Δ | % | ||
| Financial info | ||||||
| Property rental income | 14,020,771 | 9,286,366 | 4,734,405 | 51 | % | |
| Total revenue | 14,020,771 | 9,296,656 | 4,724,115 | 51 | % | |
| Net income and | ||||||
| comprehensive income | 17,636,921 | 8,773,525 | 8,863,396 | 101 | % | |
| NOI (1) | 10,417,458 | 7,126,776 | 3,290,682 | 46 | % | |
| FFO (1) | 7,820,191 | 5,149,863 | 2,670,328 | 52 | % | |
| Recurring FFO (1)(2) | 7,848,006 | 5,139,573 | 2,708,433 | 53 | % | |
| AFFO (1) | 7,234,005 | 4,747,684 | 2,486,321 | 52 | % | |
| EBITDA | 21,336,069 | 10,334,813 | 11,001,256 | 106 | % | |
| Adjusted EBITDA (1) | 10,716,808 | 7,074,997 | 3,641,811 | 51 | % | |
| Investment properties | 225,342,146 | 140,230,496 | 85,111,650 | 61 | % | |
| Adjusted investment properties (3) | 268,241,443 | 171,615,448 | 96,625,995 | 56 | % | |
| Total assets | 254,507,121 | 159,169,429 | 95,337,692 | 60 | % | |
| Total mortgage/loans/long term debt (4) | 118,970,214 | 73,912,110 | 45,058,104 | 61 | % | |
| (including revolving line of credit) | 118,970,214 | 79,247,110 | 39,723,104 | 50 | % | |
| Total convertible debentures | 8,228,420 | 3,004,263 | 5,224,157 | 174 | % | |
| Total equity | 123,207,391 | 74,303,173 | 48,904,218 | 66 | % | |
| Weighted average units o/s – basic | 18,030,472 | 14,239,993 | 3,790,479 | 27 | % | |
| Amounts on a per unit basis | ||||||
| FFO | 0.434 | 0.362 | 0.072 | 20 | % | |
| Recurring FFO | 0.435 | 0.361 | 0.074 | 21 | % | |
| AFFO | 0.401 | 0.333 | 0.068 | 20 | % | |
| Distributions | 0.225 | 0.192 | 0.033 | 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 | 9 months | ||||||||||||
| Periods ended September 30 | 2021 | 2020 | Δ | 2021 | 2020 | Δ | |||||||
| Net income (loss) attributable | |||||||||||||
| to unitholders | 11,192,478 | 2,139,737 | 9,052,741 | 17,636,921 | 8,773,525 | 8,863,396 | |||||||
| Δ in value of investment properties | (6,794,914 | ) | 101,944 | (6,896,858 | ) | (10,002,310 | ) | (2,261,029 | ) | (7,741,281 | ) | ||
| Δ in value of investment | |||||||||||||
| properties in joint ventures | (1,335,437 | ) | (573,653 | ) | (761,784 | ) | (616,951 | ) | (998,787 | ) | 381,836 | ||
| Unit based compensation | (1,905 | ) | (66,046 | ) | 64,141 | 308,546 | 38,404 | 270,142 | |||||
| Δ fair value adjustments on derivative | |||||||||||||
| financial instruments | (277,250 | ) | 85,924 | (363,174 | ) | 473,220 | (602,281 | ) | 1,075,501 | ||||
| Accretion of lease payments | 7,283 | 6,898 | 385 | 21,554 | 20,414 | 1,140 | |||||||
| Income taxes | – | 167 | (167 | ) | (789 | ) | (383 | ) | (406 | ) | |||
| Realized loss on sale of an investment property | – | 180,000 | (180,000 | ) | – | 180,000 | (180,000 | ) | |||||
| FFO(1) | 2,790,255 | 1,874,971 | 49 | % | 7,820,191 | 5,149,863 | 52 | % | |||||
| FFO per unit | 0.145 | 0.127 | 14 | % | 0.434 | 0.362 | 20 | % | |||||
| Other expenses (revenues) | – | (10,290 | ) | 10,290 | 27,815 | (10,290 | ) | 38,105 | |||||
| Recurring FFO(1) | 2,790,255 | 1,864,681 | 50 | % | 7,848,006 | 5,139,573 | 53 | % | |||||
| Recurring FFO per unit | 0.145 | 0.127 | 14 | % | 0.435 | 0.361 | 21 | % | |||||
| Distributions | 1,446,381 | 940,929 | 505,452 | 4,063,714 | 2,755,753 | 1,307,961 | |||||||
| Distributions per unit | 0.075 | 0.064 | 17 | % | 0.225 | 0.192 | 17 | % | |||||
| FFO per unit – after distributions | 0.070 | 0.063 | 13 | % | 0.209 | 0.170 | 23 | % | |||||
| Recurring FFO per unit – after distributions | 0.070 | 0.063 | 13 | % | 0.210 | 0.169 | 24 | % | |||||
| Distributions per unit as a % of | |||||||||||||
| FFO per unit | 52 | % | 50 | % | 2 | % | 52 | % | 53 | % | (1 | %) | |
| Recurring FFO per unit | 52 | % | 50 | % | 2 | % | 52 | % | 53 | % | (1 | %) | |
| Weighted avg. units o/s | |||||||||||||
| Basic | 19,186,564 | 14,726,689 | 4,459,875 | 18,030,472 | 14,239,993 | 3,790,479 | |||||||
| (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 September 30th, 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.
