TORONTO, Feb. 7, 2023 /CNW/ - First Capital Real Estate Investment Trust ("First Capital" or the "Trust") (TSX: FCR.UN), announced today financial results for the fourth quarter and year ended December 31, 2022. The 2022 Fourth Quarter Report is available in the Investors section of the Trust's website at www.fcr.ca and has been filed on SEDAR at www.sedar.com.
"We have proven the resilience of our portfolio and our team's ability to operate well through market cycles and events, as First Capital emerges from the challenges of the last several years with strong fourth quarter and full-year 2022 operational and financial results. Among our priorities for the year ahead is the continued execution of our Enhanced Capital Allocation and Portfolio Optimization Plan to further drive FFO per unit while at the same time strengthening our debt metrics," said Adam Paul, President & CEO. "This Plan is the outcome of a comprehensive and thorough review by Management and the Board on how best to unlock the value we have created in our real estate. We are encouraged that the Plan has been well received by the majority of our unitholders."
SELECTED FINANCIAL INFORMATION
Three months ended
FFO (1) ($ millions)
FFO per diluted unit (1)
Other gains and (losses) included in FFO (per diluted unit) (1)
Total Same Property NOI growth (1) (2)
Total portfolio occupancy (3)
Total Same Property occupancy (1) (3)
Net income (loss) attributable to unitholders ($ millions)
Net income (loss) attributable to unitholders per diluted unit
Weighted average diluted units for FFO and net income (000s)
(1) Refer to "Non-IFRS Financial Measures" section of this press release.
(2) Prior periods as reported; not restated to reflect current period categories.
(3) As at December 31.
ENHANCED CAPITAL ALLOCATION & PORTFOLIO OPTIMIZATION PLAN
Over the course of 2022, First Capital successfully emerged from a global pandemic, delivered on its commitment to restore unitholder distributions, announced and began to execute upon its Enhanced Capital Allocation and Portfolio Optimization Plan (the "Plan"). Over a two-year period, the Plan aims to monetize over $1 billion of low-yielding and sought-after assets, where value enhancing goals have been achieved. This will reorient First Capital's portfolio by increasing short- to medium-term net operating income and FFO growth, while at the same time reducing debt and maintaining significant long term upside through a meaningful pipeline of development assets.
Execution of the Plan includes the following accomplishments to date:
First Capital announced today in a separate press release that it has appointed Paul C. Douglas as Chair of the REIT's Board of Trustees (the "Board") and Ira Gluskin as a Trustee effective immediately. Bernard McDonell has retired from the Board effective immediately, having served as a Trustee (previously Director) since 2007 and Lead Independent Director from 2011-2019 when he was appointed Chair. This announcement comes as part of the Board's ongoing strategic approach to refreshment and planned Chair succession process that balances the need for fresh perspectives with important historical continuity. Since 2019, 5 of the 9 trustees at First Capital, including the Chair, have joined the Board as part of ongoing refreshment efforts.
FOURTH QUARTER OPERATIONAL AND FINANCIAL HIGHLIGHTS
ANNUAL OPERATIONAL AND FINANCIAL HIGHLIGHTS
FINANCIAL AND OTHER HIGHLIGHTS
Total assets (1)
Assets held for sale (1)
Unencumbered assets (2)
Net Asset Value per unit
Population Density (3)
Net debt to total assets (2)(4)
Net debt to Adjusted EBITDA (2)
Weighted average term of fixed-rate debt (years) (2)
(1) Presented in accordance with IFRS.
(2) Reflects joint ventures proportionately consolidated.
(3) The portfolio's average population density within a five kilometre radius of its properties.
(4) Total assets excludes cash balances.
Alberta Neighbourhood Retail Portfolio - Mortgage Financing
On January 26, 2023, First Capital secured $233.7 million of mortgage financing against a portfolio of six Alberta neighbourhood retail properties. Carrying a term of ten-years, the mortgages are due in January 2033. The mortgage portfolio bears interest at an effective interest rate of 5.4% per annum, payable monthly commencing February 26, 2023.
MANAGEMENT CONFERENCE CALL AND WEBCAST
First Capital invites you to participate at 2:00 p.m. (ET) on Wednesday, February 8, 2023, in a live conference call with senior management to discuss financial results for the fourth quarter and year ended December 31, 2022.
First Capital's financial statements and MD&A for the fourth quarter will be released prior to the call and will be available on its website at www.fcr.ca in the 'Investors' section, and on the Canadian Securities Administrators' website at www.sedar.com.
You can participate in the live conference by dialing 416-406-0743 or toll-free 1-800-898-3989 with access code 1317778#. The call will be accessible for replay until February 15, 2023, by dialing 905-694-9451 or toll-free 1-800-408-3053 with access code 5203702#.
To access the live audio webcast and conference call presentation, please go to First Capital's website or click on the following link Q4 2022 Conference Call. The webcast will be accessible for replay in the 'Investors' section of the website.
ABOUT FIRST CAPITAL REIT (TSX: FCR.UN)
First Capital owns, operates and develops grocery-anchored, open-air centres in neighbourhoods with the strongest demographics in Canada.
NON-IFRS FINANCIAL MEASURES
First Capital prepares and releases unaudited interim and audited annual consolidated financial statements prepared in accordance with International Financial Reporting Standards ("IFRS"). As a complement to results provided in accordance with IFRS, First Capital discloses certain non-IFRS financial measures in this press release, including but not limited to FFO, NOI, Same Property NOI, and proportionate interest. Since these non-IFRS measures do not have standardized meanings prescribed by IFRS, they may not be comparable to similar measures reported by other issuers. First Capital uses and presents the above non-IFRS measures as management believes they are commonly accepted and meaningful financial measures of operating performance. Reconciliations of certain non-IFRS measures to their nearest IFRS measures are included below. These non-IFRS measures should not be construed as alternatives to net income or cash flow from operating activities determined in accordance with IFRS as measures of First Capital's operating performance.
Funds from Operations ("FFO")
FFO is a recognized measure that is widely used by the real estate industry, particularly by publicly traded entities that own and operate income-producing properties. First Capital calculates FFO in accordance with the recommendations of the Real Property Association of Canada ("REALPAC") as published in its most recent guidance on "Funds from Operations and Adjusted Funds From Operations for IFRS" dated January 2022. Management considers FFO a meaningful additional financial measure of operating performance, as it excludes fair value gains and losses on investment properties as well as certain other items included in FCR's net income that may not be the most appropriate determinants of the long-term operating performance of FCR, such as investment property selling costs; tax on gains or losses on disposals of properties; deferred income taxes; distributions on Exchangeable Units; fair value gains or losses on Exchangeable Units; fair value gains or losses on unit-based compensation; and any gains, losses or transaction costs recognized in business combinations. FFO provides a perspective on the financial performance of FCR that is not immediately apparent from net income determined in accordance with IFRS.
A reconciliation from net income (loss) attributable to Unitholders to FFO can be found in the table below:
Three months ended December 31
Year ended December 31
Net income (loss) attributable to Unitholders
(Increase) decrease in value of investment properties (1)
(Increase) decrease in value of hotel property (1)
Adjustment for equity accounted joint ventures (2)
Adjustment for capitalized interest related to equity accounted joint ventures (2)
Incremental leasing costs (3)
Amortization expense (4)
Transaction costs (5)
Increase (decrease) in value of Exchangeable Units (6)
Increase (decrease) in value of unit-based compensation (7)
Gain on Option (8)
Investment property selling costs (1)
Deferred income taxes (recovery) (1)
(1) At FCR's proportionate interest.
(2) Adjustment related to FCR's equity accounted joint ventures in accordance with the recommendations of REALPAC.
(3) Adjustment to capitalize incremental leasing costs in accordance with the recommendations of REALPAC.
(4) Adjustment to exclude hotel property amortization in accordance with the recommendations of REALPAC.
(5) Adjustment to exclude transaction costs incurred as part of a business combination in accordance with the recommendations of REALPAC.
(6) Adjustment to exclude distributions and fair value adjustments on Exchangeable Units in accordance with the recommendations of REALPAC.
(7) Adjustment to exclude fair value adjustments on unit-based compensation plans in accordance with the recommendations of REALPAC.
(8) Adjustment to exclude the gain on option in accordance with the recommendations of REALPAC.
FORWARD-LOOKING STATEMENT ADVISORY
This press release contains forward-looking statements and information within the meaning of applicable securities law, including with respect to the anticipated execution and impact of the Enhanced Capital Allocation & Portfolio Optimization Plan. These forward-looking statements are not historical facts but, rather, reflect First Capital's current expectations and are subject to risks and uncertainties that could cause the outcome to differ materially from current expectations. Such risks and uncertainties include, among others, general economic conditions; tenant financial difficulties, defaults and bankruptcies; increases in operating costs, property taxes and income taxes; First Capital's ability to maintain occupancy and to lease or re-lease space at current or anticipated rents; development, intensification and acquisition activities; residential development, sales and leasing; risks in joint ventures; unitholder activism; environmental liability and compliance costs and uninsured losses; and risks and uncertainties related to the impact of the ongoing pandemic, epidemics or other outbreaks on First Capital which are described in First Capital's MD&A for the year ended December 31, 2022 under the heading "Risks and Uncertainties - Ongoing Pandemic, Epidemics or New Outbreaks". Additionally, forward-looking statements are subject to those risks and uncertainties discussed in First Capital's MD&A for the year ended December 31, 2022 and in its current Annual Information Form. Readers, therefore, should not place undue reliance on any such forward-looking statements.
First Capital undertakes no obligation to publicly update any such forward-looking statement or to reflect new information or the occurrence of future events or circumstances except as required by applicable securities law. All forward-looking statements in this press release are made as of the date hereof and are qualified by these cautionary statements.
SOURCE First Capital REIT
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