Killam Properties Inc. announces second quarter results highlighting a 17.6%
increase in FFO per share
Highlights of Killam's Second Quarter Financial Results - Increased funds from operations ("FFO") per share by 17.6% to $0.20 per share, from $0.17 per share generated during the second quarter of 2008. - Maintained high occupancy rates, ending the second quarter with total apartment occupancy of 96.6%, a 130 basis point improvement from June 30, 2008. - Achieved a 9.7% increase in net operating income ("NOI") from same store properties, compared to the second quarter of 2008. - Refinanced 11 mortgages totaling $18.5 million that matured in the second quarter. - Subsequent to the second quarter, on July 2, 2009, closed a public share offering for gross proceeds of $24.7 million. Financial Highlights (in thousands, except per share information) For the three months ended, June 30, 2009 June 30, 2008 % Change Rental Revenue $25,854 $23,725 9.0% Net Operating Income $16,108 $14,462 11.4% Net Income Before Tax and Depreciation $6,313 $5,234 20.6% Net Loss ($356) ($980) 63.7% Funds from Operations $6,833 $5,718 19.5% Funds from Operations per Share $0.20 $0.17 17.6% Shares Outstanding (weighted average) 34,088 33,496 1.8% For the six months ended, June 30, 2009 June 30, 2008 % Change Rental Revenue $50,871 $46,692 9.0% Net Operating Income $29,792 $26,612 11.9% Net Income Before Tax and Depreciation $10,235 $8,314 23.1% Net Loss ($2,268) ($3,373) 32.8% Funds from Operations $11,518 $9,317 23.6% Funds from Operations per Share $0.34 $0.28 21.4% Shares Outstanding (weighted average) 34,067 33,451 1.8% Balance Sheet as at, June 30, 2009 Dec 31, 2008 % Change Total Assets $734,525 $738,668 (0.6%) Total Liabilities $572,102 $565,475 1.2% Total Shareholders' Equity $162,423 $173,193 (6.2%) Gross Debt as a % of Gross Book Value 67.9% 67.7% 0.3%
FFO Per Share Increased by 17.6% in the Second Quarter
Management considers FFO per share to be a key measure of operating performance. FFO per share for the second quarter of 2009 increased by 17.6% to
Same Store NOI Growth of 9.7% Compared to the Second Quarter of 2008
Killam achieved same store NOI growth of 9.7% during the second quarter of 2009; same store properties account for 96% of the Company's portfolio. Consolidated rental revenue increased 5.1% quarter-over-quarter due to both increased rents and improved occupancy. Consolidated operating expenses decreased by 1.4% in the quarter as the Company benefited from decreased energy costs. Killam achieved same store NOI growth of 10.1% for the six months ended
The apartment portfolio realized same store NOI growth of 14.0% in the quarter. Improved occupancy and a 2.6% increase in average rents in the quarter resulted in a 5.5% increase in rental revenue. The apartment portfolio also benefited from a decrease in operating expenses, which fell by 5.5% during the second quarter due primarily to lower energy costs as Killam benefited from lower heating oil and natural gas prices. Killam's natural gas and oil expenses decreased by
The Manufactured Home Community ("MHC") portfolio had a
Vacancy at 2.1% at
Killam has maintained its trend of strong occupancy during the second quarter of 2009, achieving consolidated vacancy of 2.1% at
The apartment portfolio had a vacancy rate of 3.4% with an average monthly rent of
Average Units Vacancy Rent ------ -------- ------- Apartments Nova Scotia 4,196 3.7% $797 New Brunswick 3,310 3.6% $707 Newfoundland 732 2.2% $603 Prince Edward Island 686 1.0% $781 ----------------------------------- Total Apartment Portfolio 8,924 3.4% $747 ----------------------------------- ----------------------------------- Total MHC Portfolio 8,796 0.8% $218 -----------------------------------
New Home Sale Activity
Killam remains active in the sale of new manufactured homes; however, the Company has experienced a decrease in home sales completed during the second quarter when compared to the second quarter of 2008. During the second quarter of 2009 Killam closed 3 home sales and 4 partnership sales. This compares with the closing of 22 home sales and 3 partnership sales during the second quarter of 2008. During the first half of 2009 Killam has completed a total of 12 home sales and partnership sales compared to 39 sales during the first half of 2008.
Home sale activity levels are dependent on the timing of completion of site expansions, as well as demand for new homes across the portfolio. Killam has experienced a decrease in demand for new homes in Ontario and Western
Killam continues to anticipate selling between 40 and 60 homes in 2009, of which approximately 70% will be new home sales and 30% will be partnership sales. Killam currently has commitments for an additional 14 home sales expected to be completed during the second half of the year.
Balance Sheet Strengthened with Recent Equity Raise
On
Killam intends to use the proceeds from the offering to fund acquisitions, repay indebtedness, and for general corporate purposes. Subsequent to the end of the quarter Killam has used the funds to repay
Debt Financings
Killam is pleased to report that financing for its properties remains strong. At the beginning of the year the Company had
During the second quarter Killam refinanced
Subsequent to
Net of the above refinancings, and regular principal repayments, Killam has
As announced on
Management's Comments
"We are pleased to report strong same store NOI growth and FFO per share growth for the second quarter", noted
"We are optimistic as we look forward to the second half of 2009. With our existing portfolio fully stabilized and performing well, and increased liquidity following the recently closed equity offering, we are in a strong position to take advantage of growth opportunities over the next few quarters."
Financial Statements
Killam's
Discussion and Analysis can be found at www.killamproperties.com
Second Quarter Conference Call
Management will host a conference call to discuss these results on
A live audio webcast of the conference call will be accessible on the Company's website at www.killamproperties.com and at www.newswire.ca.
A replay will be available by dialing 416-640-1917 (
Corporate Profile
Killam Properties Inc, based in
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: Dale Noseworthy, CA, CFA, Director, Investor and External RelationsKillam Properties Inc., (902) 442-0388, [email protected]
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