Mr. Kevin Henley reports

CANADIAN NET REIT ANNOUNCES 2023 SECOND-QUARTER RESULTS

Canadian Net Real Estate Investment Trust has released its results for the quarter ended June 30, 2023 (Q2 2023). The REIT also declared distributions for the months of October, November and December, 2023.

"I am pleased to share the release of our Q2 results. Despite the challenging interest rate environment, I am delighted to share that our REIT has displayed resilience and steadiness, credited to our triple-net and management-free strategy combined with our history of conservative financing," said Kevin Henley, president and chief executive officer. "Our FFO [funds from operations] per unit for consecutive quarters remained consistent, with a 3-per-cent increase over the six-month period. Despite the various uncertainties prevalent in the market, our team has worked diligently to uphold stable performance. While the acquisition market remains quiet, our focus is on optimizing our capital structure, ensuring readiness to seize opportunities as market activity regains momentum. Throughout Q2, we enacted a range of measures set to positively impact us going forward starting in Q3 but most significantly in Q4. These encompass adjustments to our acquisition line of credit terms and the initiation of property refinancings, aimed at accessing additional liquidity for the benefit of our REIT."

Results for Q2 2023

Canadian Net reported that funds from operations (FFO) increased 0.5 per cent to $3.3-million, or 16.1 cents per unit, compared with $3.3-million, or 16 cents per unit for Q2 2023.

Rental income was $6.5-million in Q2 2023, an increase of 10.4 per cent from the three-month period ended June 30, 2022 (Q2 2022). Net operating income (NOI) in Q2 2023 was $4.9-million, an increase of 7.8 per cent from Q2 2022, primarily reflecting the year-over-year increase in rental income.

The REIT generated net income attributable to unitholders of $6-million in Q2 2023 compared with $1.9-million in Q2 2022.

Results for the six-month period ended June 30, 2023

Canadian Net reported that FFO increased 2.8 per cent to $6.5-million, or 31.8 cents per unit, compared with $6.4-million, or 31 cents per unit for Q2 2023. Rental income was $12.9-million for the six-month period ended June 30, 2023, an increase of 14.1 per cent from the same period in 2022. NOI for the six-month period ended June 30, 2023, was $9.7-million, an increase of 11.5 per cent from Q2 2022, primarily reflecting the year-over-year increase in rental income.

The REIT generated net income attributable to unitholders of $10.8-million in Q2 2023 compared with $3.4-million in Q2 2022.

The increase in FFO was primarily attributable to rental revenues of properties acquired subsequent to the second quarter a year ago, which was partially offset by the increase in financial expenses related to mortgages on the properties and higher interest rates on credit facilities, and the sale of the Timmins property in April, 2023. The increases in rental income and NOI were due to the addition of new properties and increases in rent from certain existing properties, partially offset by the sale of the Timmins property. Finally, the variance in net income attributable to unitholders is primarily attributable to the change in fair value of investment properties, in addition to the impact of NOI from newly acquired properties, partially offset by interest on mortgages associated with said properties.

Distributions

Canadian Net announced that it will make monthly cash distributions of 2.875 cents per unit, representing 34.5 cents per unit on an annualized basis, on Oct. 31, Nov. 30 and Dec. 29, 2023, to unitholders of record on Oct. 16, Nov. 15 and Dec. 15, 2023, respectively.

Earnings webcast

Canadian Net will host a webcast on Aug. 17, 2023, at 10 a.m. EST in order to discuss the results.

About Canadian Net Real Estate Investment Trust

Canadian Net is an open-ended trust that acquires and owns high-quality triple-net and management-free commercial real estate properties.

We seek Safe Harbor.