QUÉBEC, March 3, 2016 /CNW Telbec/
- Cominar Real Estate Investment Trust ("Cominar" or the
"REIT") (TSX: CUF.UN) announced today its results for
the fourth quarter and fiscal year 2015, and a new role for its
Chief Operating Officer, Sylvain
Cossette.
Highlights for the Year Ended December
31, 2015
- Increased net operating income(1) of 18.5%
- Increased recurring distributable income(1) of
19.4%
- Disposition of income properties for a purchase price of
$98.0M
- Decreased debt ratio to 53.9%
- Repurchase of units under the REIT's normal course issuer bid
("NCIB")
"I am pleased to inform you that I will be transferring the role
of President to Sylvain Cossette,
while retaining the role of Chief Executive Officer. The role
of President will be in addition to Mr. Cossette's current role of
Chief Operating Officer of Cominar. Cominar has undergone
significant growth over the last four years, and I view this
promotion as an important step in the pursuit of our organic growth
and operating goals," stated Michel
Dallaire, Chief Executive Officer of Cominar.
"As Chief Executive Officer, I remain the senior executive
officer of Cominar and fully responsible and committed to our
strategy, including finances, acquisitions and developments which
remain key to our success and future. I will also be working
closely with Mr. Cossette in the pursuit of his objectives and
areas of responsibility, being leasing, operations, asset
management and talent management," added Mr. Dallaire.
"Our excellent performance in the Greater Québec Area and in the
Montréal industrial segment as well as the important acquisitions
completed in 2014 enabled us to increase our recurring
distributable income by 19.4% and to increase our distribution at a
sustainable level over the long term," said Sylvain Cossette, President and Chief Operating
Officer of Cominar.
"During the 2015 fiscal year, we implemented a capital recycling
program and disposed of selected income properties. The net
proceeds from these dispositions were used to reduce our debt ratio
and repurchase units under our NCIB. While we are maintaining our
long-term debt ratio target of 50%, we have set our 2016 year-end
target goal at 53%," said Gilles
Hamel, Executive Vice President and Chief Financial
Officer of Cominar.
(1)
|
Non-IFRS financial
measure. See relevant section for definition and reconciliation to
closest IFRS measure.
|
PRESENTATION OF RESULTS
For the year ended
December 31, 2015, operating
revenues increased to $889.2 million, up 20.2% compared to fiscal
2014 when operating revenues were $739.9 million.
Net operating income(1) reached $487.5 million, up 18.5 % compared to
net operating income in 2014.
Net income for fiscal 2015 increased to $272.4 million compared to $199.5 million for fiscal 2014.
Cash flows provided by operating activities reached
$263.9 million for fiscal 2015
compared to $229.0 million in
2014.
Recurring distributable income(1) reached
$268.9 million, up 19.4% compared to
2014. The basic recurring distributable income per
unit(1) amounted to $1.60
for fiscal 2015.
Recurring funds from operations(1) for fiscal
2015 reached $302.2 million, up 18.5%
over fiscal 2014. Recurring funds from operations per unit fully
diluted(1) amounted to $1.79 in 2015.
Recurring adjusted funds from operations(1)
for fiscal 2015 reached $261.6
million, up 18.7% compared to 2014. Fully diluted per unit,
they amounted to $1.55 in 2015.
FINANCIAL SITUATION
As at December 31, 2015, Cominar's debt ratio decreased
to 53.9%, down from 56.1% as at December 31,
2014. At the end of fiscal 2015, total assets reached
$8.2 billion. As at December 31, 2015, the unsecured revolving credit
facility used was $381.2 million, down $76.1 million from December 31, 2014. Cash available was
$318.8 million as at
December 31, 2015.
ACQUISITIONS
On April 23,
2015, Cominar acquired 3 industrial properties located in
the Greater Montréal area, for a purchase price of $34.5 million paid in cash.
DISPOSITIONS
On September 30,
2015, Cominar announced that it completed the sale of one
industrial and mixed-used property and two office properties
located in Montréal, for a total purchase price of $98.0 million. This amount contributed to reduce
our debt ratio to 53.9%.
FINANCING
On July 6,
2015 and September 8, 2015,
Cominar redeemed early all of the Series E and D convertible
debentures respectively totalling $186.0
million and a weighted average interest rate of 6.15%. These
transactions eliminated the dilutive effect of the convertible
debentures.
(1)
|
Non-IFRS financial
measure. See relevant section for definition and reconciliation to
closest IFRS measure.
|
SHARES
During fiscal 2015, Cominar set up an NCIB and
repurchased 530 836 units for a total consideration of
$7.7 million.
SUBSEQUENT EVENTS AFTER DECEMBER 31,
2015
On January 20,
2016 Cominar announced the suspension of the distribution
reinvestment plan. This suspension does not affect the regular
monthly cash distribution.
On January 29, 2016, Cominar
completed the sale of a portfolio of ten retail properties located
in the Québec and Montréal areas and in Ontario, for a sales price of $15.2 million at a 6.7% capitalization rate
reflecting an increase in the fair value of these properties in our
books.
Under the NCIB, Cominar has repurchased, since the beginning of
fiscal year 2016, 2,072,976 units for a consideration of
$30.0 million. Since the beginning of
the program, Cominar repurchased a total of 2,603,812 units for a
total consideration of $37.7 million.
RESULTS OF
OPERATIONS
|
|
|
|
|
|
Quarter
|
|
Cumulative
|
For the periods
ended December 31
|
2015
|
2014
|
% Δ
|
|
2015
|
2014
|
% Δ
|
|
($000)
|
($000)
|
|
|
($000)
|
($000)
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
217,049
|
217,492
|
(0.2)
|
|
889,175
|
739,884
|
20.2
|
Operating
expenses
|
94,274
|
92,057
|
2.4
|
|
401,687
|
328,605
|
22.2
|
Net operating income
(1)
|
122,775
|
125,435
|
(2.1)
|
|
487,488
|
411,279
|
18.5
|
Finance
charges
|
(41,652)
|
(46,402)
|
(10.2)
|
|
(176,208)
|
(149,385)
|
18.0
|
Trust administrative
expenses
|
(4,138)
|
(3,723)
|
11.1
|
|
(16,384)
|
(12,977)
|
26.3
|
Share of joint
ventures' net income
|
(399)
|
8,923
|
(104.5)
|
|
1,427
|
10,918
|
(86.9)
|
Change in fair value
of investment properties
|
(23,322)
|
(33,951)
|
(31.3)
|
|
(23,322)
|
(33,951)
|
(31.3)
|
Transaction costs –
business combination
|
—
|
(5,143)
|
(100.0)
|
|
—
|
(26,667)
|
(100.0)
|
Income
taxes
|
(264)
|
688
|
(138.4)
|
|
(567)
|
236
|
(340.3)
|
Net income
|
53,000
|
45,827
|
15.7
|
|
272,434
|
199,453
|
36.6
|
Net income per unit
(diluted)
|
0.31$
|
0.29$
|
6.9
|
|
1.62$
|
1.45$
|
11.7
|
(1)
|
Non-IFRS financial
measure. See relevant section for definition and reconciliation to
closest IFRS measure.
|
NON-IFRS FINANCIAL MEASURES
Net operating income,
recurring distributable income (DI), recurring funds from
operations (FFO) and recurring adjusted funds from operations
(AFFO) are not measures recognized by International Financial
Reporting Standards ("IFRS") and do not have standardized meanings
prescribed by IFRS. Such measures may differ from similar
computations as reported by similar entities and, accordingly, may
not be comparable to similar measures reported by such other
entities.
The following table presents a reconciliation of cash flows
provided by operating activities to recurring distributable income
and recurring adjusted funds from operations:
|
Quarter
|
|
Cumulative
|
For the periods
ended December 31
|
2015
|
2014
|
|
2015
|
2014
|
|
($000)
|
($000)
|
|
($000)
|
($000)
|
|
|
|
|
|
|
Cash flows provided
by operating activities as shown in the consolidated financial
statements
|
107,679
|
110,266
|
|
263,942
|
229,030
|
+
|
Adjustments -
investments in joint ventures
|
444
|
(332)
|
|
2,018
|
782
|
-
|
Amortization of other
assets
|
(404)
|
(243)
|
|
(1,079)
|
(884)
|
+
|
Transaction costs –
business combination
|
—
|
5,143
|
|
—
|
26,667
|
-
|
Provision for leasing
costs
|
(5,100)
|
(5,790)
|
|
(22,300)
|
(19,840)
|
+
|
Initial and
re-leasing salary costs
|
661
|
620
|
|
2,763
|
2,238
|
+
|
Change in non-cash
working capital items
|
(32,808)
|
(39,147)
|
|
23,508
|
(12,837)
|
Recurring
distributable income (1)
|
70,472
|
70,517
|
|
268,852
|
225,156
|
-
|
Capital expenditures
– maintenance of rental income generating capacity
|
(2,483)
|
(1,976)
|
|
(7,207)
|
(4,793)
|
Recurring adjusted
funds from operations (1)
|
67,989
|
68,541
|
|
261,645
|
220,363
|
(1)
|
Non-IFRS financial
measure. See relevant section for definition and reconciliation to
closest IFRS measure.
|
The following table presents a reconciliation of the cash flows
from operating activities with funds from recurring operations:
|
Quarter
|
|
Cumulative
|
For the periods
ended December 31
|
2015
|
2014
|
|
2015
|
2014
|
|
($000)
|
($000)
|
|
($000)
|
($000)
|
|
|
|
|
|
|
Cash flows provided
by operating activities as shown in the condensed interim
consolidated financial statements
|
107,679
|
110,266
|
|
263,942
|
229,030
|
-
|
Adjustments –
investments in joint ventures(2)
|
836
|
(8,528)
|
|
759
|
(8,673)
|
+
|
Amortization
|
1,077
|
185
|
|
2,476
|
5,320
|
-
|
Compensation expense
related to long-term incentive plan
|
(486)
|
(377)
|
|
(1,970)
|
(1,414)
|
+
|
Recognition of leases
on straight-line basis
|
1,609
|
73
|
|
7,303
|
3,854
|
+
|
Excess of
proportionate share of net income over distributions received from
the joint ventures
|
(399)
|
8,173
|
|
1,227
|
9,443
|
+
|
Transaction costs –
business combination
|
—
|
5,143
|
|
—
|
26,667
|
+
|
Write-off of deferred
financing costs
|
—
|
1,021
|
|
2,232
|
1,522
|
+
|
Initial and
re-leasing salary costs
|
661
|
620
|
|
2,763
|
2,238
|
+
|
Change in non-cash
working capital items
|
(32,808)
|
(39,147)
|
|
23,508
|
(12,837)
|
Recurring funds
from operations(1)
|
78,169
|
77,429
|
|
302,240
|
255,150
|
ADDITIONAL FINANCIAL INFORMATION
Cominar's
consolidated financial statements and management's discussion and
analysis for the year ended December 31,
2015, will be filed with SEDAR at www.sedar.com and will be
available on Cominar's website at www.cominar.com.
(1)
|
Non-IFRS financial
measure. See relevant section for definition and reconciliation to
closest IFRS measure.
|
(2)
|
Including
Cominar's proportionate share in joint ventures.
|
CONFERENCE CALL ON MARCH 3,
2016
On Thursday, March 3,
2016 at 11 a.m. (ET), Cominar's management will hold a
conference call to present the results for fiscal 2015. Anyone who
is interested may take part in this call by dialing
1 888 390-0546. A presentation regarding these
results will be available before the conference call on the REIT's
website at www.cominar.com, under the Conference Call header. In
addition, a taped rebroadcast of the conference call will be
available from Thursday, March 3,
2016 at 2 p.m. to Thursday, March 10, 2016 at 11:59 p.m., by dialing 1 888 390-0541
followed by this code: 882644#.
PROFILE AS AT MARCH 3,
2016
Cominar is the third largest diversified real
estate investment trust in Canada
and currently remains the largest commercial property owner in the
Province of Quebec. The REIT owns
a real estate portfolio of 556 properties in three different market
segments, that is, office properties, retail properties and
industrial and mixed-use properties. Cominar's portfolio totals
45.3 million square feet spread out across Quebec, Ontario, the Atlantic Provinces and
Western Canada. Cominar's
objectives are to pay growing cash distributions to unitholders and
to maximize unitholder value through proactive management and the
expansion of its portfolio.
FORWARD-LOOKING STATEMENTS
This press release may
contain forward-looking statements with respect to Cominar and its
operations, strategy, financial performance and financial
condition. These statements generally can be identified by the use
of forward-looking words such as "may", "will", "expect",
"estimate", "anticipate", "intend", "believe" or "continue" or the
negative thereof or similar variations. The actual results and
performance of Cominar discussed herein could differ materially
from those expressed or implied by such statements. Such statements
are qualified in their entirety by the inherent risks and
uncertainties surrounding future expectations. Some important
factors that could cause actual results to differ materially from
expectations include, among other things, general economic and
market factors, competition, changes in government regulation and
the factors described under "Risk Factors" in Cominar's Annual
Information Form. The cautionary statements qualify all
forward-looking statements attributable to Cominar and persons
acting on its behalf. Unless otherwise stated, all forward-looking
statements speak only as of the date of this press release. Cominar
does not assume any obligation to update the aforementioned
forward-looking statements, except as required by applicable
laws.
SOURCE COMINAR REAL ESTATE INVESTMENT TRUST