TORONTO, May 15, 2018 /CNW/ - Automotive Properties Real Estate Investment Trust (TSX: APR.UN) ("Automotive Properties REIT" or the "REIT") today announced its financial results for the three-month period ended March 31, 2018 ("Q1 2018"). The REIT's unaudited condensed consolidated financial statements and the related Management's Discussion & Analysis ("MD&A") for Q1 2018 are available on the REIT's website at www.automotivepropertiesreit.ca and on SEDAR at www.sedar.com.
Q1 2018 Highlights
- Property rental revenue was $11.3 million, an increase of 14.4% from the first quarter of 2017 ("Q1 2017");
- Net Operating Income1 ("NOI") was $9.6 million, up 16.2% from Q1 2017;
- Total and Same Property Cash NOI1 were $8.9 million and $7.6 million, respectively, representing increases of 17.0% and 1.4%, respectively, from Q1 2017;
- Net Income was $14.5 million, compared to $1.1 million in Q1 2017;
- Funds from Operations1 ("FFO") increased 12.2% to $6.7 million, from $5.9 million in Q1 2017. FFO per unit of the REIT ("Unit") was $0.254 (diluted), up from $0.244 (diluted) in Q1 2017;
- Adjusted Funds from Operations1 ("AFFO") increased 13.3% to $6.1 million, from $5.4 million in Q1 2017. AFFO per Unit was $0.231 (diluted), up from $0.219 (diluted) in Q1 2017;
- On February 13, 2018, the REIT acquired an automotive dealership property in Kitchener-Waterloo, Ontario that will be redeveloped for a luxury, high-end car company that will occupy the premises;
- The REIT declared monthly cash distributions of $0.067 per Unit, resulting in total distributions declared and paid of approximately $5.3 million, representing an AFFO payout ratio1 of approximately 87.0%; and
- The REIT's debt to gross book value ("Debt to GBV")1 was 48.7% as at March 31, 2018, compared to 48.5% as at December 31, 2017.
"Our financial results for the quarter reflect the positive impact of our acquisition program and steady organic growth from the contractual annual rent increases across most of the leases in our property portfolio," said Milton Lamb, CEO of Automotive Properties REIT. "With a sound balance sheet, we remain focused on building unitholder value and scaling our portfolio in our target markets across Canada through the continued execution of our growth strategy."
1 NOI, Cash NOI, Same Property Cash NOI, FFO, AFFO, and Debt to GBV are non-IFRS financial measures. See "Non-IFRS Financial Measures" in this news release. Reference to "Same Property" correspond to properties that the REIT owned in Q1 2017, thus removing the impact of acquisitions.
Q1 2018 Financial Results Summary ($000s, except per Unit amounts)
Three months ended
($000s, except per Unit amounts)
Rental revenue (1)
Same Property Cash NOI (1)
Distributions per Unit
FFO per Unit - basic (3)
FFO per Unit - diluted (4)
AFFO per Unit - basic (3)
AFFO per Unit - diluted (4)
Payout ratios (%)
Debt to GBV
Rental revenue is based on rents from leases entered into with tenants on closing of the applicable acquisitions, all of which are triple-net leases and include recoverable realty taxes and straight-line adjustments. Same Property Cash NOI is based on rental revenue for the same asset base having consistent gross leasable area in both periods.,
The increase in net income for Q1 2018 includes changes in the fair value adjustments for Class B LP Units, investment properties, and interest rate swaps, please refer to financial statements and notes thereto
FFO per Unit and AFFO per Unit – basic is calculated by dividing the total FFO and AFFO by the amount of the total weighted average number of outstanding Units and Class B limited partnership units of Automotive Properties Limited Partnership ("Class B LP Units"). The total weighted average number of Units outstanding (including Class B LP Units) - basic for Q1 2018 was 26,149,253.
FFO per Unit and AFFO per Unit – diluted is calculated by dividing the total FFO and AFFO by the amount of the total weighted average number of outstanding Units, Class B LP Units, deferred units ("DUs") and income deferred units ("IDUs") granted to certain independent trustees and management of the REIT. The total weighted average number of Units outstanding (including Class B LP Units, DUs and IDUs) on a fully diluted basis for Q1 2018 was 26,232,967.
Rental revenue was $11.3 million in Q1 2018, an increase of 14.4% compared to $9.9 million in Q1 2017. Increased rental revenue reflects growth from properties acquired subsequent to Q1 2017 and contractual annual rent increases across a significant portion of the portfolio.
Property costs were $1.7 million in Q1 2018, compared to $1.6 million in Q1 2017. The increase in property costs is attributable to the properties acquired subsequent to Q1 2017. Property costs as a percentage of revenue decreased from 16.4% in Q1 2017 to 15.1% in Q1 2018, primarily due to higher rental revenue from the properties acquired subsequent to Q1 2017.
Total and Same Property Cash NOI generated during Q1 2018 totaled $8.9 million and $7.6 million, respectively, representing increases of 17.0% and 1.4%, respectively, from Q1 2017. The year-over-year increases in total and Same Property Cash NOI were attributable to the properties acquired subsequent to Q1 2017 and the annual contractual rent increases across a significant portion of the portfolio.
Net Income was $14.5 million in Q1 2018, compared to $1.1 million in Q1 2017. The increase was primarily attributable to the change in the fair value adjustments for Class B LP Units, investment properties, and interest rate swaps, as well as growth in NOI.
FFO in Q1 2018 was $6.7 million, or $0.254 per Unit (diluted), compared to $5.9 million, or $0.244 per Unit, in Q1 2017. The increase was primarily due to the impact of the properties acquired subsequent to Q1 2017.
AFFO in Q1 2018 was $6.1 million, or $0.231 per Unit (diluted), compared to $5.4 million, or $0.219 per Unit, in Q1 2017. The increase was primarily due to the impact of the properties acquired subsequent to Q1 2017.
Adjusted Cash Flow from Operations ("ACFO") in Q1 2018 was $5.9 million, representing an increase of 11.1% from $5.3 million in Q1 2017. The ACFO payout ratio was 88.9% in Q1 2018, compared to 93.5% in Q1 2017. The lower ACFO payout ratio for Q1 2018 relative to Q1 2017 was primarily attributable to the impact of the properties acquired subsequent to Q1 2017.
The REIT is currently paying monthly cash distributions of $0.067 per Unit, representing $0.804 per Unit on an annualized basis. The REIT declared and paid total distributions of $5.3 million to unitholders in Q1 2018, or $0.201 per Unit, representing an AFFO payout ratio of 87.0%. The lower AFFO payout ratio for Q1 2018 relative to Q1 2017 was primarily attributable to the impact of the properties acquired subsequent to Q1 2017.
As at March 31, 2018, there were 16,216,000 REIT Units and 9,933,253 Class B LP Units outstanding.
Management of the REIT will host a conference call for analysts and investors on Wednesday, May 16, 2018 at 10:00 a.m. (ET). The dial-in numbers for the conference call are (647) 427-7450 or (888) 231-8191. A live and archived webcast of the call will be accessible via the REIT's website www.automotivepropertiesreit.ca.
To access a replay of the conference call, dial (416) 849-0833 or (855) 859-2056, passcode: 9882439. The replay will be available until May 23, 2018.
About Automotive Properties REIT
Automotive Properties REIT is an unincorporated, open-ended real estate investment trust focused on owning and acquiring primarily income-producing automotive dealership properties located in Canada. Currently, the REIT's portfolio consists of 39 income-producing commercial properties, representing approximately 1.4 million square feet of gross leasable area, and one development property in metropolitan markets across Ontario, Saskatchewan, Alberta, British Columbia and Québec. Automotive Properties REIT is the only public vehicle in Canada focused on consolidating automotive dealership real estate properties. For more information, please visit: www.automotivepropertiesreit.ca.
This news release contains forward-looking information within the meaning of applicable securities legislation, which reflects the REIT's current expectations regarding future events and in some cases can be identified by such terms as "will" and "expected". Forward looking information includes the REIT's future acquisition capacity. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the REIT's control that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to, the factors discussed under "Risks and Uncertainties" in the REIT's MD&A for the year ended December 31, 2017 and in the REIT's current annual information form, both of which are available on SEDAR (www.sedar.com). The REIT does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law. This forward-looking information speaks only as of the date of this news release.
Non-IFRS Financial Measures
This news release contains certain financial measures which are not defined under IFRS and may not be comparable to similar measures presented by other real estate investment trusts or enterprises. FFO, AFFO, FFO payout ratio, AFFO payout ratio, NOI, Same Property NOI, Cash NOI, and Same Property Cash NOI are key measures of performance used by the REIT's management and real estate businesses. Debt to GBV is a measure of financial position defined by the REIT's declaration of trust. These measures, as well as any associated "per Unit" amounts, are not defined by IFRS and do not have standardized meanings prescribed by IFRS, and therefore should not be construed as alternatives to net income or cash flow from operating activities calculated in accordance with IFRS. The REIT believes that AFFO is an important measure of economic earnings performance and is indicative of the REIT's ability to pay distributions from earnings, while FFO, NOI, Cash NOI and Same Property Cash NOI are important measures of operating performance of real estate businesses and properties. The IFRS measurement most directly comparable to FFO, AFFO, NOI and Cash NOI is net income. ACFO is a supplementary measure used by management to improve the understanding of the operating cash flow of the REIT. The IFRS measurement most directly comparable to ACFO is cash flow from operating activities. See the REIT's Q1 2018 MD&A for further discussion of these non-IFRS financial measures and for a reconciliation of NOI, FFO, AFFO and Cash NOI to net income and comprehensive income and ACFO to cash flow from operating activities.
SOURCE Automotive Properties Real Estate Investment Trust
View original content: http://www.newswire.ca/en/releases/archive/May2018/15/c8256.html
Bruce Wigle, Investor Relations, Bay Street Communications, Tel: 647-496-7856; Milton Lamb, President & CEO, Automotive Properties REIT, Tel: (647) 789-2445; Andrew Kalra, CFO & Corporate Secretary, Automotive Properties REIT, Tel: (647) 789-2446