Huntingdon REIT reports 2009 first quarter results



    WINNIPEG, May 12 /CNW/ - Huntingdon Real Estate Investment Trust
("HREIT") (TSX: HNT.UN) today reported its operating results for the quarter
ended March 31, 2009. The following comments in regard to the financial
position and operating results of HREIT should be read in conjunction with the
March 31, 2009 Management Discussion and Analysis and the financial statements
for the quarter ended March 31, 2009, which may be obtained from the HREIT
website at www.hreit.ca or the SEDAR website at www.sedar.com.
    During 2009, HREIT is focused on attaining improved results through a
number of initiatives, including the divestiture of selected properties, the
paydown of higher cost interim debt and the completion of property renovations
and leasehold improvements. HREIT is also striving to attain improved net
operating income results from its real estate portfolio in an uncertain
economic environment.
    During the first quarter of 2009, HREIT incurred a loss from continuing
operations before taxes of approximately $3.3 million, compared to a loss from
continuing operations before taxes of approximately $1.9 million during the
first quarter of 2008 and $2.5 million during the fourth quarter of 2008. The
increase in the loss, in comparison to both the first and fourth quarters of
2008, is mainly due to a decrease in the net operating income of the retail
property portfolio as a result of a reduced occupancy level and an increase in
operating costs.
    The decrease in net operating income was also the main contributing
factor in the decrease in cash from operating activities during the first
quarter of 2009. In comparison to the first quarter of 2008, cash from
operating activities, before lease acquisition costs and charges in non-cash
operating items, decreased by approximately $1.3 million, during the first
quarter of 2009.
    On May 1, 2009, HREIT completed the sale of Cityplace, at a price of
$81.5 million, and also sold the retail property at 1250 Steeles Avenue in
Brampton, Ontario, at a price of $5.3 million. The sale of the two properties
and, in particular, the sale of Cityplace, enabled HREIT to repay $59.3
million of mortgage debt, $21.5 million of interim financing and improve the
working capital position.

    
    FINANCIAL AND OPERATING SUMMARY
                                                 Three Months Ended March 31
                                                -----------------------------
                                                        2009         2008
                                                    ------------ ------------
    KEY PERFORMANCE INDICATORS

    Operating results
      Total revenue                                  16,538,189   17,286,738
      Net operating income                            8,457,537    9,822,612
      Income (loss) from continuing operations
       before income tax recovery (expense)          (3,341,278)  (1,859,724)
      Income (loss) from continuing operations       (2,721,672)  (1,129,160)
      Income (loss) for the period                   (2,809,303)  (1,965,345)

    Cash flows
      Cash inflow (outflow) from operating
       activities                                     1,825,413    1,767,180
      Funds from Operations (FFO)                       906,412    2,816,011
      Adjusted Funds from Operations (AFFO)           1,229,979    1,366,843
      Distributable income                            1,753,093    3,078,770

    Operations
      Quarter end occupancy rate                            93%          92%
      Increase (decrease) in same property operating
       income                                             (15)%         (1)%

    Capital reinvestment
      Additions to building and equipment                53,905      504,256
      Additions to properties under development               -    2,578,872
      Lease acquisition costs                           557,817    1,503,346

    DISTRIBUTIONS
      Amount - total                                          -    5,061,040
             - per unit                                       -         0.07

    Financing
      Mortgage loan debt to gross book value ratio          54%          59%
      Weighted average interest rate of long-term debt    5.83%        6.44%


    PER UNIT AMOUNTS
                                               Three Months Ended March 31
                                                 2009              2008
                                          ----------------- -----------------
                                           Basic   Diluted   Basic   Diluted
                                          ------- --------- ------- ---------
    Operating income                       0.116     0.116   0.136     0.136
    Income (loss) from continuing
     operations before income tax
     recovery expense                     (0.046)   (0.046) (0.026)   (0.026)
    Income (loss) from continuing
     operations                           (0.037)   (0.037) (0.016)   (0.016)
    Income (loss) for the period          (0.038)   (0.038) (0.027)   (0.027)
    Funds from Operations (FFO)            0.012     0.012  (0.039)   (0.039)
    Adjusted Funds from
     Operations (AFFO)                     0.017     0.017  (0.020)   (0.020)
    Distributable income                   0.024     0.024  (0.043)   (0.043)


    First Quarter 2009 Compared to First Quarter 2008

    -  NOI decreased by approximately $1.4 million or 14%, mainly due to a
       decrease in NOI from the retail property portfolio, as a result of a
       decrease in the occupancy level, and an increase in operating costs.

    -  Loss from continuing operations before taxes increased by
       approximately $1.5 million primarily due to the decrease in NOI.

    -  After considering the decrease in future income tax recoveries of
       $111,000 and the decrease in the loss from discontinued operations of
       $749,000, the overall loss increased by $844,000.

    -  Cash provided by operating activities, excluding changes in non-cash
       operating items decreased by $353,000. The decrease mainly reflects
       the decrease in NOI, largely offset by a decrease in lease acquisition
       costs of $946,000.

    -  FFO decreased by $1.9 million or 68% during the first quarter of 2009,
       compared to the first quarter of 2008, while AFFO decreased by $68,152
       or 5%. On a per unit basis, FFO decreased by $0.026 per unit, while
       AFFO decreased by $0.002 per unit.

    -  Distributable Income decreased by $1.3 million or 42%, during the
       first quarter of 2009, compared to the first quarter of 2008


    Comparison to Preceding Quarter
    -------------------------------------------------------------------------

                                        Three Months Ended        Effect on
                                    ---------------------------     Income
                                       March 31,   December 31,    Increase
                                         2008          2008       (Decrease)
                                    -----------------------------------------
    Total revenues                  $ 16,538,189  $ 17,832,706  $ (1,294,517)
    Total operating and property
     management costs                  8,080,652     7,986,659       (93,993)
                                    ------------- ------------- -------------
    Net operating income               8,457,537     9,846,047    (1,388,510)
    Trust expenses                       790,473       718,148       (72,325)
    Strategic review expense                   -       382,574       382,574
                                    ------------- ------------- -------------
    Income before financing expense,
     amortization, discontinued
     operations and taxes              7,667,064     8,745,325    (1,078,261)
    Financing expense                  6,673,021     6,731,264        58,243
                                    ------------- ------------- -------------
    Income before amortization,
     discontinued operations and
     taxes                               994,043     2,014,061    (1,020,018)
    Amortization                       4,335,321     4,569,535       234,214
                                    ------------- ------------- -------------
    Loss from continuing operations
     before income tax
     recoveries/expense               (3,341,278)   (2,555,474)     (785,804)
    Income tax recoveries                619,606    (1,014,436)    1,634,042
                                    ------------- ------------- -------------
    Loss from continuing operations   (2,721,672)   (3,569,910)      848,238
    Income from discontinued
     operations                          (87,631)     (105,035)       17,404
                                    ------------- ------------- -------------
    Income (loss) for the period    $ (2,809,303) $ (3,674,945) $    865,642
                                    ------------- ------------- -------------
                                    ------------- ------------- -------------
    

    Excluding income tax recoveries and discontinued operations, HREIT
incurred a loss of approximately $3.3 million during the first quarter of
2009, compared to a loss of approximately $2.5 million in the fourth quarter
of 2008, representing an increase in the loss of approximately $800,000. The
increase in the loss mainly reflects a decrease in net operating income,
partially offset by a decrease in strategic review expense and amortization
charges.
    After including income tax recoveries and discontinued operations, HREIT
completed the three month period ended March 31, 2009 with a loss of $2.8
million compared to a loss of $3.6 million during the fourth quarter of 2008.

    Outlook for 2009

    In 2009, HREIT is focused on attaining improved results through a number
of initiatives, including the divestiture of selected properties, repayment of
higher cost interim debt, and the projected completion of over $12 million in
property improvements and upgrades
    With only $2.3 million of higher rate interim financing mortgages
remaining, HREIT expects to achieve a substantial reduction in debt service
costs during the remainder of 2009. The reduction in debt service costs,
combined with a budgeted improvement in net operating income from continuing
properties and the completion of value-added capital expenditures, should
result in an improvement in overall operating results, commencing in the
second quarter of 2009. Additional property sales are targeted for the second
and third quarter of the year, which should further strengthen the overall
financial position.

    
    About HREIT
    -----------
    HREIT is a real estate investment trust, which is listed on the Toronto
Stock Exchange under the symbols HNT.UN (Trust Units) and HNT.DB.C (Series C
Convertible Debentures). HREIT owns 75 income producing office, industrial,
retail and standalone parking lot properties that have a total gross leaseable
owned area of 4.9 million square feet; two land parcels held for development
and other development and expansion opportunities within the existing
portfolio. The properties are located in Manitoba, Ontario, Saskatchewan,
Alberta, British Columbia and Northwest Territories. HREIT also owns CRESI
Inc., a third party property management business. For further information on
HREIT, please visit our website at www.hreit.ca.

    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.

    The Toronto Stock Exchange has not reviewed or approved the contents of
    this press release and does not accept responsibility for the adequacy or
    accuracy of this press release.
    





For further information:

For further information: Arni Thorsteinson, President & Chief Executive
Officer, or Gino Romagnoli, Investor Relations, Tel: (204) 475-9090, Fax:
(204) 452-5505, Email: info@hreit.ca

Organization Profile

HUNTINGDON REAL ESTATE INVESTMENT TRUST

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