Subject: ERN
LANESBOROUGH REIT REPORTS 2022 THIRD QUARTER RESULTS
WINNIPEG, MB, Nov. 24, 2022 /CNW/ - Lanesborough Real Estate Investment Trust ("LREIT") (TSXV: LRT.UN) today reported its operating results for the quarter ended September 30, 2022. The following comments in regard to the financial position and operating results of LREIT should be read in conjunction with the interim management's discussion & analysis ? quarterly highlights ("MD&A ? QH") and the interim financial statements for the quarter ended September 30, 2022, which may be obtained from the SEDAR website at www.sedar.com.
ANALYSIS OF OPERATING RESULTS
Analysis of Income (Loss) and Comprehensive Income (Loss) | ||||||
Three Months Ended September 30 | Nine Months Ended September 30 | |||||
Increase (Decrease) in Income | ||||||
2022 | 2021 | Amount | % | 2022 | 2021 | |
Rentals from investment properties | $ 4,417,868 | $ 4,758,470 | $ (340,602) | (7) % | $ 13,438,795 | $ 13,764,122 |
Rental loss insurance proceeds | - | 618,647 | (618,647) | (100) % | - | 618,647 |
Property operating costs | (3,110,373) | (3,205,468) | 95,095 | 3 % | (9,609,990) | (9,556,479) |
Net operating income (NOI) | 1,307,495 | 2,171,649 | (864,154) | (40) % | 3,828,805 | 4,826,290 |
Interest income | 19,464 | 43,715 | (24,251) | (55) % | 73,145 | 130,356 |
Interest expense | (2,713,225) | (3,166,891) | 453,666 | 14 % | (8,212,072) | (9,178,341) |
Trust expense | (291,396) | (288,962) | (2,434) | (1) % | (1,170,877) | (917,822) |
Loss before the following | (1,677,662) | (1,240,489) | (437,173) | (35) % | (5,480,999) | (5,139,517) |
Fair value adjustments | 11,162,152 | (546,573) | 11,708,725 | 2,142 % | 9,707,894 | (10,908,331) |
Gain on extinguishment of Series G Debentures | - | - | - | - | 19,797,489 | - |
Income (loss) before discontinued operations | 9,484,490 | (1,787,062) | 11,271,552 | 631 % | 24,024,384 | (16,047,848) |
Loss from discontinued operations | (525,089) | (535,198) | 10,109 | 2 % | (1,674,720) | (1,421,690) |
Income (loss) and comprehensive income (loss) | $ 8,959,401 | $ (2,322,260) | $ 11,281,661 | 486 % | $ 22,349,664 | $ (17,469,538) |
Overall Results
LREIT completed Q3-2022 with an income and comprehensive income of $9.0 million, compared to a loss and comprehensive loss of $2.3 million, during the same period in the prior year, representing an increase in income of $11.3 million.
The increase in income mainly reflects a favourable fair value adjustment variance of $11.7 million, as well as a decrease in interest expense of $0.5 million, partially offset by a decrease in net operating income ("NOI") of $0.9 million.
The favourable fair value adjustment variance is mainly due to gains from fair value adjustments recognized during Q3-2022, in the amount of $11.2 million. The fair value adjustments recognized during Q3-2022 mainly reflect an increase in the carrying value of the Fort McMurray properties segment, primarily as a result of changes made to key valuation assumptions to incorporate information obtained from external appraisals received during the quarter and in recognition of the existing favourable occupancy trend.
The decrease in interest expense is primarily attributable to the exchange of the Series G Debentures for Trust Units on February 24, 2022. Interest recorded on the Series G Debentures during Q3-2021 amounted to $0.3 million.
The decrease in NOI mainly reflects a decrease in the NOI of the Held for Sale properties segment, due to the sale of Woodland Park during Q1-2022; and a decrease in rental loss insurance proceeds, due to proceeds recognized during Q3-2021 related to the April 2020 flood. As outlined in greater detail in the Analysis of Operating Results ? Rental Revenues From Investment Properties section of the MD&A - QH, the average occupancy of the Fort McMurray properties segment increased from 84% during Q3-2021 to 90% during Q3-2022. The average monthly rental rate decreased by $16 from $1,424 during Q3-2021 to $1,408 during Q3-2022.
ABOUT LREIT
LREIT is a real estate investment trust, which is listed on the TSX Venture Exchange under the symbol LRT.UN (Trust Units). For further information on LREIT, please visit our website at www.lreit.com.
This press release contains certain statements that could be considered as forward-looking information. The forward-looking information is subject to certain risks and uncertainties, which could result in actual results differing materially from the forward-looking statements.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as the term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Lanesborough Real Estate Investment Trust
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