NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
OTTAWA, May 14, 2018 (GLOBE NEWSWIRE) -- InterRent Real Estate Investment Trust (TSX:IIP.UN) (“InterRent” or the “REIT”) today reported financial results for the first quarter ended March 31, 2018.
Highlights
Financial Highlights
| Selected Consolidated Information In $000’s, except per Unit amounts and other non-financial data | 3 Months Ended March 31, 2018 | 3 Months Ended March 31, 2017 | Change | |||||
| Total suites | 8,959 | 8,283 | +8.2 | % | ||||
| Average rent per suite (March) | $ | 1,117 | $ | 1,061 | +5.3 | % | ||
| Occupancy rate (March) | 96.7 | % | 95.2 | % | +150bps | |||
| Operating revenues | $ | 30,161 | $ | 25,133 | +20.0 | % | ||
| Net operating income (NOI) | $ | 18,350 | $ | 14,306 | +28.3 | % | ||
| NOI % | 60.8 | % | 56.9 | % | +390bps | |||
| Same property average rent per suite (March) | $ | 1,112 | $ | 1,052 | +5.7 | % | ||
| Same property occupancy rate (March) | 97.2 | % | 95.5 | % | +170bps | |||
| Same property NOI | $ | 15,952 | $ | 13,704 | +16.4 | % | ||
| Same property NOI % | 61.6 | % | 57.6 | % | +400bps | |||
| Net Income/(loss) | $ | (11,938 | ) | $ | 8,292 | n/a | ||
| Funds from Operations (FFO) | $ | 9,273 | $ | 6,782 | +36.7 | % | ||
| FFO per weighted average unit - diluted | $ | 0.105 | $ | 0.091 | +15.4 | % | ||
| Adjusted Funds from Operations (AFFO) | $ | 8,098 | $ | 5,811 | +39.4 | % | ||
| AFFO per weighted average unit - diluted | $ | 0.092 | $ | 0.078 | +17.9 | % | ||
| Distributions per unit | $ | 0.0675 | $ | 0.0608 | +11.0 | % | ||
| Adjusted Cash Flow from Operations (ACFO) | $ | 9,603 | $ | 5,932 | +61.6 | % | ||
| ACFO payout ratio | 63.2 | % | 77.8 | % | -1,460 bps | |||
| Debt to GBV | 44.4 | % | 50.7 | % | -630bps | |||
| Interest coverage (rolling 12 months) | 2.80x | 2.53x | +0.27x | |||||
| Debt service coverage (rolling 12 months) | 1.81x | 1.58x | +0.23x | |||||
Gross rental revenue for the quarter was $29.5 million, an increase of $4.0 million, or 15.9%, compared to Q1 2017. Operating revenue for the quarter was up $5.0 million to $30.2 million, or 20.0% compared to Q1 2017. The average monthly rent across the portfolio for March 2018 increased to $1,117 per suite from $1,061 (March 2017), an increase of 5.3%. The March 2018 vacancy rate across the entire portfolio was 3.3%, a decrease from 4.8% recorded in March 2017. “Continued strong demand in our key growth markets has allowed us to continue driving rents, resulting in significant improvements to operating performance and FFO/AFFO per Unit. Strong demand also continued for multifamily assets which has resulted in further cap rate compression in core markets across Ontario and Quebec,” said Mike McGahan, CEO.
On a same property portfolio basis (same properties are income properties owned by the REIT throughout the comparative periods), the average monthly rent per suite increased from $1,052 (March 2017) to $1,112 (March 2018), an increase of 5.7%. Management expects to continue to grow revenues organically through moving to market rent on suite turnovers, guideline increases, continued roll-out of AGIs, as well as continuing to drive other ancillary revenue streams.
NOI for the quarter was $18.4 million, or 60.8% of operating revenue, compared to $14.3 million, or 56.9% of operating revenue, for the three months ended March 31, 2017. NOI from the same property portfolio increased to $16.0 million for Q1 2018, an increase of $2.2 million, or 16.4%, over Q1 2017. Same property NOI margin for the quarter was 61.6%.
Net income/(loss) for the quarter was $(11.9) million, compared to $8.3 million for Q1 2017. The decrease of $20.2 million was driven primarily by the property management internalization cost of $44.0 million. Removing this non-recurring event, net income would have been $32.1 million.
About InterRent
InterRent REIT is a growth-oriented real estate investment trust engaged in increasing Unitholder value and creating a growing and sustainable distribution through the acquisition and ownership of multi-residential properties.
InterRent's primary objective is to use the proven industry experience of the Trustees, Management and Operational Team to: (i) provide Unitholders with stable and growing cash distributions from investments in a diversified portfolio of multi-residential properties; (ii) enhance the value of the assets and maximize long-term Unit value through the active management of such assets; and (iii) expand the asset base and increase Distributable Income through accretive acquisitions.
*Non-GAAP Measures
InterRent prepares and releases unaudited quarterly and audited consolidated annual financial statements prepared in accordance with IFRS (GAAP). In this and other earnings releases, as a complement to results provided in accordance with GAAP, InterRent also discloses and discusses certain non-GAAP financial measures, including Gross Rental Revenue, NOI, Same Property results, FFO, AFFO, ACFO and EBITDA. These non-GAAP measures are further defined and discussed in the MD&A dated May 14, 2018, which should be read in conjunction with this press release. Since Gross Rental Revenue, NOI, Same Property results, FFO, AFFO, ACFO and EBITDA are not determined by GAAP, they may not be comparable to similar measures reported by other issuers. InterRent has presented such non-GAAP measures as Management believes these measures are relevant measures of the ability of InterRent to earn and distribute cash returns to Unitholders and to evaluate InterRent's performance. These non-GAAP measures should not be construed as alternatives to net income (loss) or cash flow from operating activities determined in accordance with GAAP as an indicator of InterRent's performance.
Cautionary Statements
The comments and highlights herein should be read in conjunction with the most recently filed annual information form as well as our consolidated financial statements and management’s discussion and analysis for the same period. InterRent’s publicly filed information is located at www.sedar.com.
This news release contains “forward-looking statements” within the meaning applicable to Canadian securities legislation. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “anticipated”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. InterRent is subject to significant risks and uncertainties which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward looking statements contained in this release. A full description of these risk factors can be found in InterRent’s most recently publicly filed information located at www.sedar.com. InterRent cannot assure investors that actual results will be consistent with these forward looking statements and InterRent assumes no obligation to update or revise the forward looking statements contained in this release to reflect actual events or new circumstances.
The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
For further information about InterRent please contact:
| Mike McGahan | Brad Cutsey, CFA | Curt Millar, CPA, CA |
| Chief Executive Officer | President | Chief Financial Officer |
| Tel: (613) 569-5699 Ext 244 | Tel: (613) 569-5699 Ext 226 | Tel: (613) 569-5699 Ext 233 |
| Fax: (613) 569-5698 | Fax: (613) 569-5698 | Fax: (613) 569-5698 |
| e-mail: mmcgahan@interrentreit.com | e-mail: bcutsey@interrentreit.com | e-mail: cmillar@interrentreit.com |
web site: www.interrentreit.com