Fronsac REIT Announces Very Strong Results for Q2 2016 and the September 30th, 2016 Regular Quarterly Distribution
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E-mailMONTREAL, QUEBEC -- (Marketwired) -- 08/24/16 -- (TSX VENTURE: GAZ.UN) Fronsac Real Estate Investment Trust ("Fronsac REIT" or "Fronsac") today announced its results for Q2 2016 and a distribution of 0.4075 cents per unit to unitholders of record on September 16th, 2016 and payable on September 30th, 2016.
For the quarter ended June 30th, 2016, Fronsac reported funds from operations ("FFO") of $269,978, a decrease of 20% ($335,658 in Q2 2015). For Q2 2016, FFO per unit was 0.58 cents compared to 0.73 cents per unit for the quarter ended June 30th, 2015, a decrease of 20%. It should be noted that Q2 2015 results include a $90,000 non-recurring revenue for the negotiation of a lease. When taking this into consideration, Q2 2015 FFO amounts to $245,658. When comparing 2016 to 2015 the Trust managed to increase its FFO by 10% on a nominal and per unit basis (0.58 cents for Q2 2016 versus 0.53 cents for Q2 2015). During Q2 2016 the Trust's property rental income was $645,440 compared to $539,430 in Q2 2015, an increase of 20%. NOI (Net operating Income) was $557,306 compared to $562,476 in Q2 2015, a decrease of 1%. Fronsac recorded a net loss attributable to unitholders of $485,256, or 1.05 cents per unit, compared to net income of $589,897, or 1.28 cents per unit, for Q2 2015.
For the six months ended June 30th, 2016, Fronsac reported funds from operations ("FFO") of $688,215, an increase of 22% ($562,514 in Q2 2015). For Q2 2016, FFO per unit was 1.48 cents compared to 1.22 cents per unit for the quarter ended June 30th, 2015, an increase of 22%. Included in 2016 results was a one-time payment received from a national tenant in the amount of $150,000 for the renewal of a lease. Q2 2015 results include a $90,000 non-recurring revenue for the negotiation of a lease. When both adjustments are taken into consideration and comparing 2016 to 2015, the Trust managed to increase its FFO by 14% on a nominal and per unit basis (1.16 cents for Q2 2016 versus 1.02 cents for Q2 2015). During Q2 2016 the Trust's property rental income was $1,246,088 compared to $987,200 in Q2 2015, an increase of 26%. NOI (Net operating Income) was $1,219,775 compared to $963,246 in Q2 2015, an increase of 27%. Fronsac recorded a net income attributable to unitholders of $1,043,376, or 2.25 cents per unit, compared to $738,172, or 1.6 cents per unit, for Q2 2015.
Michel Lassonde President and CEO said: "We are pleased with the growth we have been able to demonstrate in the first 6 months of 2016. With the recent equity raise and acquisitions in the month of August, we are confident that we can continue to deliver our promise of creating value for our unitholders."
The tables below represent other financial highlights as well as the reconciliation from net income to FFO for the periods ended June 30th, 2016 and its comparative period. This information should be read in conjunction with the Consolidated Financials Statements and MD&A for the quarters ended June 30th, 2016 and June 30th, 2015.
SUMMARY OF SELECTED QUARTERLY INFORMATION
6 months
Periods ended June 30 2016 2015 Change %
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Financial info
Property rental income 1,246,088 987,200 258,888 26%
Total revenue 1,403,896 1,077,200 326,696 30%
NOI (1) 1,219,775 963,246 256,529 27%
FFO (1) 688,215 562,514 125,701 22%
AFFO (1) 654,376 553,589 100,787 18%
EBITDA (1) 1,004,929 815,476 189,453 23%
Investment properties (2) 34,173,569 30,699,406 3,474,163 11%
Total assets 34,449,189 31,219,554 3,229,635 10%
Total mortgage/loans/long term
debt (3) 17,592,674 15,454,934 2,137,740 14%
Total exchangeable preferred
units 926,027 889,015 37,012 4%
Total convertible debentures 248,468 247,170 1,298 1%
Total equity 14,837,658 13,939,869 897,789 6%
Weighted average units o/s -
basic 46,398,806 46,228,751 170,055 0.4%
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Amounts on a per unit basis
FFO 0.0148 0.0122 0.0027 22%
AFFO 0.0141 0.0120 0.0021 18%
Distributions 0.0080 0.0076 0.0004 5%
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(1) Non-IFRS financial measures
(2) Includes value of investment properties owned through joint ventures
(3) Excludes convertible debentures and exchangeable preferred units
RECONCILIATION OF NET INCOME TO FFO
3 months
Periods ended June 30 2016 2015 Change
----------------------------------------------------------------------------
Net income (loss) attributable
to unitholders (485,256) 589,897 (1,075,153)
Change in value of investment
properties 613,020 (254,824) 867,844
Change in value of investment
properties in joint ventures 27,984 - 27,984
Unit based compensation 41,075 - 41,075
Change in liability component of
exchangeable preferred units 6,143 5,293 850
Change in fair value of derivative
financial instruments 61,150 (4,335) 65,485
Realized/unrealized gain on interest
swaps - - -
Change in fair value of other
financial components 5,640 (700) 6,340
Income taxes 222 327 (105)
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FFO(1) - basic 269,978 335,658 (20%)
FFO per unit - basic 0.0058 0.0073 (20%)
Distributions paid on exchangeable
units (if dilutive) 12,584 11,966 618
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FFO - diluted 282,562 347,624 (19%)
FFO per unit - diluted 0.0057 0.0070 (19%)
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Distributions 189,197 179,136 10,061
Distributions per unit 0.0041 0.0039 5%
FFO - basic after distributions 0.0017 0.0034 (0.0016)
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Distributions as a % of
FFO - basic 70% 53% 17%
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Weighted avg. units o/s
Basic 46,418,861 46,228,751 190,110
Diluted 49,507,061 49,316,951 190,110
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(1) FFO is a Non-IFRS financial measure
6 months
2016 2015 Change
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Net income (loss) attributable
to unitholders 1,043,376 738,172 305,204
Change in value of investment
properties (477,164) (198,075) (279,089)
Change in value of investment
properties in joint ventures - - -
Unit based compensation 41,075 - 41,075
Change in liability component of
exchangeable preferred units 19,586 17,905 1,681
Change in fair value of derivative
financial instruments 56,235 3,080 53,155
Realized/unrealized gain on interest
swaps - - -
Change in fair value of other
financial components 4,885 1,105 3,780
Income taxes 222 327 (105)
----------------------------------------
FFO(1) - basic 688,215 562,514 22%
FFO per unit - basic 0.0148 0.0122 22%
Distributions paid on exchangeable
units (if dilutive) 32,051 23,394 8,657.00
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FFO - diluted 720,266 585,908 23%
FFO per unit - diluted 0.0146 0.0119 23%
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Distributions 368,915 350,183 18,732
Distributions per unit 0.0080 0.0076 5%
FFO - basic after distributions 0.0069 0.0046 0.0023
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Distributions as a % of
FFO - basic 54% 62% (9%)
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Weighted avg. units o/s
Basic 46,398,806 46,228,751 170,055
Diluted 49,487,006 49,316,951 170,055
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(1) FFO is a Non-IFRS financial measure
About Fronsac - Fronsac Real Estate Investment Trust is an open-ended trust that acquires and owns high quality commercial real estate properties situated along highways or frequently travelled routes, rented to strong tenants under long term, management free and net leases. These properties are occupied by tenants within the following sectors; (1) Fast food chains, (2) Major oil/gas companies and (3) Convenience store chains.
Forward-Looking Statements - This press release contains forward-looking statements and information as defined by applicable securities laws. Fronsac 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 standards, as well as other risks and factors described from time to time in the documents filed by Fronsac with securities regulators, including the management report. Fronsac 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 Provide) accepts any responsibility for the adequacy or accuracy of this release.
The June 30th, 2016 financial statements and management discussion & analysis of Fronsac REIT may be viewed on SEDAR at www.sedar.com
Contacts: Jason Parravano (450) 536-5328
Source: Fronsac Real Estate Investment Trust
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