HALIFAX, Nov. 6 /CNW/ -
Highlights of Killam's Q3 Financial Results
- Increased operating revenue 22.0% to $22.1 million.
- Increased income from property operations 21.7% to $14.0 million.
- Increased funds from operations ("FFO") per share by 18.7% to $0.19
per share from $0.16 per share, when normalized for land sale in the
third quarter of 2006.
- New home sales at manufactured home community expansions contributed
positively to NOI.
Financial Highlights ($ thousands, except per share information)
For the three months ended, September 30, September 30, %
2007 2006 Change
Operating revenue $22,082 $18,103 22.0%
FFO $6,229 $3,856 61.5%
FFO/share $0.19 $0.18 5.6%
FFO/share excluding land sale $0.19 $0.16 18.7%
For the nine months ended, September 30, September 30, %
2007 2006 Change
Operating revenue $61,679 $50,521 22.1%
FFO $13,720 $9,831 39.6%
FFO/share $0.48 $0.47 2.1%
FFO/share excluding land sales $0.48 $0.42 14.3%
As at, September 30, December 31, %
2007 2006 Change
Total Assets $721,536 $588,372 22.6%
Total Liabilities $521,166 $480,719 8.4%
Total Shareholders' Equity $200,370 $107,653 86.1%
Debt as a % of Gross Book Value 66.1% 75.7% (12.7%)
Killam Properties Inc. (TSX:KMP/KMP:DB) is pleased to announce its
financial results for the third quarter ended September 30, 2007. Killam
continued to grow during the third quarter of 2007 with the purchase of
292 apartment units and 953 manufactured home community ("MHC") sites, and the
expansion of an additional 42 MHC sites. Killam's portfolio as at September
30, 2007, totaled 16,746 units, consisting of 8,506 apartment units and
8,240 MHC sites, representing a mix of approximately 77% and 23% of its real
estate assets, respectively. For the nine months ended September 30, 2007,
Killam has grown its portfolio by 18.8%.
FFO for the third quarter of 2007 increased to $6.2 million from
$3.9 million in the same period last year representing a 61.5% increase in
quarterly performance year-over-year. FFO per share was $0.19, compared to
$0.18 in the third quarter of 2006; however FFO in 2006 included a
$0.4 million, or $0.02 per share, gain relating to the sale of surplus land.
Killam's FFO per share in the quarter improved 18.7% over the same quarter in
2006, after excluding the land sale gain in 2006. FFO per share for the nine
months ended September 30, 2007, has increased 14.3% to $0.48 from $0.42 for
the nine months ended September 30, 2006, after excluding land sales gains in
Killam recorded a net loss of $0.01 per share in the third quarter of 2007
compared to a net loss of $0.03 per share for the third quarter of 2006. The
2006 results included the impact of the sale of surplus land, as noted above.
Net loss per share in the third quarter of 2006, excluding the land sale was
$0.05. The net loss is after depreciation expense of $0.19 per share during
the third quarter of 2007 and $0.21 per share in the same period of 2006.
Killam's gross book value of real estate assets at the end of September 30,
2007 was $725.2 million, representing an increase of 21.3% and 25.9% compared
to $597.7 million as at December 31, 2006, and $575.8 million at September 30,
- Achieved 4.8% same store net operating income growth year-to-date,
including 5.4% for the apartment segment and 2.7% for MHCs. Same store
results relate to properties that Killam owned for equivalent periods
in 2007 and 2006.
- Implemented average rent increases of 2.8% year-to-date on same store
- Acquired $45.2 million of properties during the third quarter, and
$105.0 million of properties during the nine months ended September 30,
- Completed the 42 site expansion of Birch Hill MHC in Halifax.
- Realized earnings on 25 home sales and home sale placements in the
third quarter, with an average margin of $15,700 per home.
- Continued to operate at reduced debt levels, ending the quarter with
debt to gross book value of 66.1%, compared to 77.5% at the end of the
third quarter of 2006.
- Completed the third quarter with $21.3 million of cash on hand
available for future acquisitions.
On September 30, 2007, Killam's portfolio had an overall vacancy of 2.6%.
The apartment portfolio had a vacancy rate of 3.9% with an average monthly
rent of $707. The MHC portfolio had a vacancy rate of 1.3%, with an average
monthly rent of $213. Approximately 99 additional vacant apartment units were
undergoing renovation and therefore unavailable for renting compared to 146 at
September 30, 2006. Approximately 106 MHC sites have not been previously
rented, including recently expanded sites at Birch Hill and Greenhill in Nova
Scotia. These units are excluded in the table below which displays information
as at September 30, 2007.
Units Vacancy Average Rent
------- --------- -------------
NOVA SCOTIA 3,889 3.4% $750
NEW BRUNSWICK 3,193 4.8% $680
NEWFOUNDLAND 711 1.7% $574
PRINCE EDWARD ISLAND 614 5.0% $735
APARTMENTS 8,407 3.9% $707
MANUFACTURED HOME COMMUNITIES 8,134 1.3% $213
Recent Acquisition Activity
On September 27, 2007 Killam purchased Millcreek, a MHC located near
Guelph, Ontario. Millcreek is situated on 35 acres of land and contains
72 fully occupied sites with an average rent of $306, and includes the
potential opportunity for a 48 site expansion. The purchase price of
$2.3 million ($31,940 per existing site) was satisfied with an interest free
vendor take back loan of $100,000, with the balance in cash. The acquisition
is expected to be financed with a new mortgage of $1.6 million during the
Subsequent to quarter-end Killam has completed the acquisition of Family
Paradise Campground, a seasonal MHC located in the community of Walton in
Southwestern Ontario. Family Paradise is situated on 50 acres and contains
214 sites with an annualized rent per site of approximately $1,450. The
property includes many recreational facilities. The purchase price of
$1.7 million was satisfied with cash, and is expected to be financed with a
new mortgage of $1.2 million during the fourth quarter.
"We are pleased to report another strong quarter of FFO per share growth"
commented Philip Fraser, Killam's President and CEO. "Improved same store
performance, strong occupancy, accretive acquisitions and new MHC home sales
all contributed to this growth. Killam's home sale business increased this
quarter with a total of 25 home sales. We are optimistic on the potential
impact the new home sale business will have on Killam's internal growth as we
add to our unit count with the expansion of many of our communities."
"Finally, we have approximately $20 million of cash available for future
acquisitions and we continue to find attractive acquisition opportunities
across Canada. During the third quarter we purchased our first property in
British Columbia, our third property in Alberta and three more MHCs in
Ontario, where we now own 20 communities. We are interested in expanding our
apartment ownership outside Atlantic Canada and expect to continue to be
active in acquisitions across the country."
Killam's September 30, 2007 Financial Statements and Notes and
Management's Discussion and Analysis can be found on our website at
Killam Properties Inc, based in Halifax, Nova Scotia, is one of Canada's
largest residential landlords, owning and operating multi-family apartments
and manufactured home communities.
FFO is a generally accepted measure of operating performance of real
estate companies; however, it is a non-GAAP measurement and readers are
cautioned that Killam's calculation of FFO may be different than that used by
other companies. Killam calculates FFO as net income plus depreciation and
amortization, stock compensation, non-cash debenture interest and future
income tax expenses.
Note: The Toronto Stock Exchange has neither approved nor disapproved of
the information contained herein. Certain statements in this report may
constitute forward-looking statements relating to our operations and the
environment in which we operate, which are based on our expectations,
estimates, forecast and projections, which we believe are reasonable as of the
current date. Such forward-looking statements involve risks, uncertainties and
other factors which may cause actual results, performance or achievements of
Killam to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. For more
exhaustive information on these risks and uncertainties, you should refer to
our most recently filed annual information form which is available at
www.sedar.com. Readers, therefore, should not place undue reliance on any such
forward-looking statements. Further, a forward-looking statement speaks only
as of the date on which such statement is made and should not be relied upon
as of any other date. Other than as required by law, Killam does not undertake
to update any of such forward-looking statements.
For further information:
For further information: Killam Properties Inc., Dale Noseworthy, CA,
CFA, Director, Investor and External Relations, (902) 442-0388, Fax: (902)