Le Lézard
Classified in: Business
Subjects: EARNINGS, v

Canadian Net REIT Announces its Results for the Quarter Ended September 30, 2022, an Increase in its Per Unit Distributions for 2023 and Q1 2023 Monthly Distributions


MONTRÉAL, Nov. 21, 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 September 30th, 2022, an increase in its per unit distributions for an 11th consecutive year, and monthly distributions for the months of January, February and March 2023.

Jason Parravano, President and CEO says: "I am pleased to share our results this quarter, which demonstrate the strength and resilience of our portfolio. Despite a challenging macro-environment, highlighted by higher interest rates and inflation, we continue to deliver per unit FFO accretion which has permitted us to once again, and for an 11th consecutive year, raise our distribution headed into 2023. This will mark a cumulative 176% increase in our per unit distribution rate since we began distributing in 2012."

RESULTS

For the quarter ended September 30th, 2022, Canadian Net reported funds from operations per unit1 ("FFO per unit") of $0.163 compared to $0.145 per unit for the quarter ended September 30th, 2021, an increase of 12%. Funds from Operations1 ("FFO") was $3,347,120, an increase of 20% relative to $2,790,255 in Q3 2021.

During Q3 2022, the Trust's property rental income was $6,369,404 compared to $4,885,412 in Q3 2021, an increase of 30%. Net Operating Income1 ("NOI") was $4,773,698 compared to $3,725,787 in Q3 2021, an increase of 28%.

Canadian Net also recorded a loss attributable to unitholders of $540,958 compared to a net income of $11,192,478 in Q3 2021.

For the nine-month period ended September 30th, 2022, Canadian Net reported FFO per unit1 of $0.474 compared to $0.434 per unit for the same period in 2021, an increase of 9%. FFO1 was $9,709,595, an increase of 24% relative to $7,820,191 for the nine-month period ended September 30th, 2021.

During the period, the Trust's property rental income was $17,676,041 compared to $14,020,771 for the same period in 2021, an increase of 26%. NOI1 was $13,494,033 compared to $10,417,458 for the same period in 2021, an increase of 30%.

Canadian Net also recorded a net income attributable to unitholders of $2,816,358 compared to $17,636,921 for the same period in 2021.

The FFO1 increase was primarily due to the impact of the newly acquired properties, partially offset by interest on mortgages associated with said properties and higher interest rates on existing variable-rate mortgages and credit facilities. On the rental income and NOI1 sides, the increases can be explained by the impact of the newly acquired properties. Finally, the net income variance can be attributed 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.

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".

DISTRIBUTIONS

Starting in January 2023, the annual distribution will go from $0.34 to $0.345 per unit, representing an increase of 1.5%. With this increase, Canadian Net's distributions have increased 176% since its first distributions in 2012, representing a compounded annual growth rate of 9.7%.

Canadian Net announces that it will make monthly cash distributions of $0.02875 per unit, representing $0.345 per unit on an annualized basis, on January 31st, February 28th and March 31st, 2023, to unitholders of record on January 13th, February 15th and March 15th, 2023, respectively.

The tables below represent other financial highlights as well as the reconciliations of certain non-IFRS measures for the periods ended September 30th, 2022, 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, 2022, and the Consolidated Financial Statements and MD&A for the quarter ended September 30th, 2021.

SUMMARY OF SELECTED FINANCIAL INFORMATION

 9 months 
Periods ended September 3020222021 ?%
Financial info     
Property rental income17,676,04114,020,771 3,655,27026%
Net income and comprehensive income2,816,35817,636,921 (14,820,563)(84%)
NOI (1)13,494,03310,417,458 3,076,57530%
FFO (1)9,709,5957,820,191 1,889,40424%
AFFO (1)9,178,2677,234,005 1,944,26227%
EBITDA (1)7,277,20020,862,849 (13,585,649)(65%)
Adjusted EBITDA (1)13,658,11010,716,808 2,941,30227%
Investment properties291,358,184225,342,146 66,016,03829%
Adjusted investment properties (1)338,203,870268,241,443 69,962,42726%
Total assets315,184,668254,507,121 60,677,54724%
Mortgages135,331,955108,234,779 27,097,17625%
Long-term debt45,00060,000 (15,000)(25%)
Current portion of mortgages and long term-debt21,187,43610,675,435 10,512,00198%
Credit facilities16,435,362- 16,435,362n/a
Total convertible debentures8,442,2628,228,420 213,8423%
Total equity129,746,124123,207,391 6,538,7335%
Weighted average units o/s - basic20,488,42918,030,472 2,457,95714%
Amounts on a per unit basis     
FFO(1)0.4740.434 0.0409%
AFFO(1)0.4480.401 0.04712%
Distributions0.2550.225 0.03013%
(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".

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. Information appearing in this news release is a select summary of results. This news release should be read in conjunction with the condensed consolidated financial statements and MD&A for the Trust. Please refer to the "Non IFRS Financial Measures" section in Canadian Net's management's discussion and analysis for the period ended September 30, 2022, available under Canadian Net's profile on SEDAR at www.sedar.com for a full description of these measures and, where applicable, a reconciliation to the most directly comparable measure calculated in accordance with IFRS. Such explanation is incorporated by reference herein.

In addition, below are the reconciling tables for the non-IFRS measures used in this press release.

Reconciliation of Investment Properties to Adjusted Investment Properties

As at September 3020222021 ?
Investment Properties    
Developed properties291,358,184225,342,146 29%
Joint Venture Ownership(1)    
Developed properties43,999,12139,222,865 12%
Properties under development2,846,5653,676,432 (23%)
Adjusted Investment Properties(2)338,203,870 268,241,443  26%
(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  9 months 
Periods ended September 3020222021  ? 20222021  ?
Rental Income6,369,4044,885,412 1,483,992 17,676,04114,020,771 3,655,270
Operating costs(1,595,706)(1,159,625) (436,081) (4,182,008)(3,603,313) (578,695)
Net Operating Income(1)4,773,6983,725,787 1,047,911 13,494,03310,417,458 3,076,575
Share of net income (loss) from investments in joint ventures(119,309)1,760,905 (1,880,214) 935,2311,866,328 (931,097)
Increase/(decrease) in fair values of investment properties(3,295,446)6,794,914 (10,090,360) (6,353,047)10,002,310 (16,355,357)
Financial expenses1,561,826885,608 676,218 4,079,9813,721,491 358,490
Administrative expenses222,210205,425 16,785 672,702619,138 53,564
Unit-based compensation115,865(1,905) 117,770 507,176308,546 198,630
Net income and comprehensive income(540,958)11,192,478 (11,733,436) 2,816,35817,636,921 (14,820,563)
FFO(1)3,347,1202,790,255 20% 9,709,5957,820,191 24%
FFO per unit(1)0.1630.145 12% 0.4740.434 9%
Weighted avg. units o/s Basic20,592,73319,186,564 1,406,169 20,488,42918,030,472 2,457,957
(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"

Reconciliation Of Net Income to Funds From Operations

 3 months  9 months 
Periods ended September 3020222021  ? 20222021  ?
Net income attributable to unitholders(540,958)11,192,478 (11,733,436) 2,816,35817,636,921 (14,820,563)
? in value of investment properties3,295,446(6,794,914) 10,090,360 6,353,047(10,002,310) 16,355,357
? in value of investment properties in joint ventures591,229(1,335,437) 1,926,666 418,539(616,951) 1,035,490
Unit based compensation115,865(1,905) 117,770 507,176308,546 198,630
? fair value adjustments on derivative financial instruments(112,130)(277,250) 165,120 (390,676)473,220 (863,896)
Interest on the lease liability-7,283 (7,283) 7,48321,554 (14,071)
Income taxes(2,332)- (2,332) (2,332)(789) (1,543)
FFO(1)3,347,1202,790,255 20% 9,709,5957,820,191 24%
FFO per unit(1)0.1630.145 12% 0.4740.434 9%
Distributions1,748,3681,446,381 301,987 5,218,5364,063,714 1,154,822
Distributions per unit0.0850.075 13% 0.2550.225 13%
FFO per unit(1) - after distributions0.0780.070 10% 0.2190.209 5%
Distributions per unit as a % of FFO per unit(1)52%52% - 54%52% 2%
Weighted avg. units o/s Basic20,592,73319,186,564 1,406,169 20,488,42918,030,472 2,457,957
(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  9 months 
Periods ended September 3020222021  ? 20222021  ?
FFO (1)3,347,1202,790,255 556,865 9,709,5957,820,191 1,889,404
Amortization of finance charges included in interest expense-- - -- -
Straight-line rent adjustment(2)(119,325)(142,009) 22,684 (362,280)(447,320) 85,040
Maintenance/cap-ex on existing properties(85,072)(46,558) (38,514) (169,048)(138,866) (30,182)
Leasing costs on existing properties-- - -- -
Debt extinguishment penalties-- - -- -
AFFO(1)3,142,7232,601,688 21% 9,178,2677,234,005 27%
AFFO per unit(1)0.1530.136 13% 0.4480.401 12%
Distributions per unit0.0850.075 13% 0.2550.225 13%
AFFO per unit(1) - after distributions0.0680.061 12% 0.1930.176 10%
Distributions per unit(1) as a % of AFFO per unit(1)56%55% 1% 57%56% 1%
Weighted avg. units o/s Basic20,592,73319,186,564 1,406,169 20,488,42918,030,472 2,457,957
(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 the proportionate share of equity accounted investments

Reconciliation of Net Income to EBITDA

 3 months 9 months 
Periods ended September 3020222021  ? 20222021  ?
Net income attributable to unitholders(540,958)11,192,478 (11,733,436) 2,816,35817,636,921 (14,820,563)
Net interest expense1,671,2011,160,610 510,591 4,463,6643,244,782 1,218,882
Interest on the lease liability-(7,283) 7,283 (7,483)(21,554) 14,071
Income taxes(2,332)- (2,332) (2,332)(789) (1,543)
Other financial charges2,7552,248 507 6,9933,489 3,504
EBITDA(1)1,130,66612,348,053 (11,217,387) 7,277,20020,862,849 (13,585,649)
? in value of investment properties3,295,446(6,794,914) 10,090,360 6,353,047(10,002,310) 16,355,357
? in value of investment properties in joint ventures591,229(1,335,437) 1,926,666 418,539(616,951) 1,035,490
? in value of convertible debentures(112,130)(164,945) 52,815 (317,496)272,848 (590,344)
? in value of warrants-(112,305) 112,305 (73,180)200,372 (273,552)
Adjusted EBITDA(1)4,905,2113,940,452 24% 13,658,11010,716,808 27%
Interest expense1,751,4041,301,854 449,550 4,694,7633,332,560 1,362,203
Principal repayments1,145,038836,828 308,210 3,249,9802,424,317 825,663
Debt service requirements2,896,4422,138,682 35% 7,944,7435,756,877 38%
Interest coverage ratio based on adjusted EBITDA(1)2.8x3.0x (0.2x) 2.9x3.2x (0.3x)
Debt service coverage based on adjusted EBITDA(1)1.7x1.8x (0.1x) 1.7x1.9x (0.2x)
(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"

EARNINGS WEBCAST
Canadian Net will host a webcast on November 22nd, 2022, at 10:00 am (EST) in order to discuss the results.

The link to join the webcast is the following: https://edge.media-server.com/mmc/p/ma2akihb

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 Provider) accepts any responsibility for the adequacy or accuracy of this release.

The September 30th, 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.



These press releases may also interest you

at 14:30
Electrolit Renews Partnership with Patricio "Pato" O'Ward, Extending Sponsorship for Third Consecutive Year
Electrolit ? the preferred, premium hydration beverage made from pharmaceutical quality grade ingredients ? today announces the continuation of its successful partnership with acclaimed racing driver Patricio "Pato" O'Ward for the third consecutive...

at 14:16
Strengthening Canadian research and innovation
Gen Z and millennials are the engine of our economy. Everything that is created, built, served, and sold in Canada is increasingly being done by millennials and Gen Z. They're the young parents, the students doing cutting-edge research, the young...

at 14:16
Minister Duclos to highlight Budget 2024: Fairness for Every Generation investments to support young Canadian entrepreneurs
The Honorable Jean-Yves Duclos, Member of Parliament for Quebec and Minister of Public Services and Procurement will host an event to highlight the federal budget's investments supporting young Canadian entrepreneurs and strengthening the economy in...

at 14:15
Yeelight Elevates RGB Experience with SignalRGB Integration
Yeelight, a pioneer in smart lighting solutions, proudly announces its collaboration with SignalRGB, empowering users to seamlessly control Yeelight products alongside other RGB devices for an immersive lighting experience. SignalRGB is a popular...

at 14:00
CodersTrust secures partnership with the City College of New York (CCNY)
CodersTrust, a global EdTech Company with its headquarters in New York City, announced it signed an agreement at a ceremony on April 12th with City College of New York (CCNY) to provide programs for upskilling students and enable them to achieve...

at 13:49
Energy Transition Accelerator Advances with New Secretariat, Expert Consultative Group
The U.S. Department of State, the Bezos Earth Fund, and The Rockefeller Foundation today announced next steps for the future governance and structure of the Energy Transition Accelerator (ETA), a high-integrity carbon finance platform aimed at...

More news about Business...


News published on and distributed by: