TransGlobe Apartment REIT reports initial financial results
MISSISSAUGA, ON, Aug. 10 /CNW/ - TransGlobe Apartment Real Estate Investment Trust (TSX: TGA.UN) (the "REIT") today announced financial results for its initial reporting period as a publicly traded real estate investment trust. The REIT completed its Initial Public Offering (IPO) on May 14, 2010 and is reporting results for the 48-day period commencing May 14th and ending June 30, 2010. For comparative purposes, the REIT has also provided pro-rated figures from its 2010 forecast (the "Forecast'), as presented in its IPO prospectus.
Percentage calculations are based on the numbers in the financial statements and may not correspond to rounded figures presented in this release. Full Financial Statements and Management's Discussion and Analysis are available on the REIT's website at www.tgareit.com and under the REIT's profile on SEDAR at www.sedar.com.
Financial Highlights
-------------------------------------------------------------------------
May 14, 2010 to
June 30, 2010 Forecast
-------------------------------------------------------------------------
$000
-------------------------------------------------------------------------
Revenue $11,770 $11,615
-------------------------------------------------------------------------
Net Operating Income (NOI) $6,919 $6,702
-------------------------------------------------------------------------
NOI margin 59.3% 58.1%
-------------------------------------------------------------------------
Funds from Operations (FFO) $4,470 $4,204
-------------------------------------------------------------------------
Adjusted Funds from Operations (AFFO) $3,414 $3,197
-------------------------------------------------------------------------
AFFO per unit $0.11 $0.11
-------------------------------------------------------------------------
Distributions declared for period $2,967 $2,967
-------------------------------------------------------------------------
Distributions per unit $0.099 $0.099
-------------------------------------------------------------------------
AFFO Payout Ratio 86.9% 92.8%
-------------------------------------------------------------------------
Certain measures in the above table are not defined by generally accepted accounting principles ("GAAP"). See "Non-GAAP Financial Measures" below.
The REIT's MD&A includes reconciliations of Income before non-controlling interest to FFO and FFO to AFFO.
"We are pleased with the results of the REIT's initial 48-day period, which were modestly in excess of management's expectations," said Kelly Hanczyk, Chief Executive Officer of the REIT. "Our overall occupancy rate remained stable in the period, despite some uncharacteristic weakness in certain markets. This underlines the importance of the REIT's commitment to diversifying our holdings across a range of strong and stable markets across Canada."
The REIT's overall occupancy rate of 95.0% for the period exceeded the Forecast occupancy rate of 94.2%. As a result, the REIT generated total property revenue of $11.77 million compared with the Forecast of $11.62 million. This favorable overall occupancy level was primarily attributable to strength in the Ontario rental market. This was partially offset by higher vacancy levels in Alberta and Atlantic Canada, trends that are not expected to continue beyond the short-term.
In the reporting period, the REIT reported Net Operating Income ("NOI") of $6.9 million, 3% higher than the Forecast of $6.7 million. As a result of this higher-than-forecast NOI, the REIT generated $4.47 million in Funds from Operations ("FFO") for the period, 7% higher than the Forecast of $4.20 million for the same period, representing $0.15 compared to $0.14 on a per unit basis.
Adjusted Funds from Operations ("AFFO") for the period was $3.4 million, 6% above the Forecast level of $3.2 million for the period. The REIT's AFFO per unit was in line with the forecast of $0.11 per unit, with a payout ratio of 86.9% compared to the Forecast of 92.8%.
Net income for the period of $1.5 million compared favorably to the $1.4 million Forecast for the period. "The REIT is well positioned with a diversified portfolio mix, strong pipeline of potential acquisitions and depth of operational expertise from TransGlobe Property Management," added Mr. Hanczyk. "With the access to capital markets provided by our IPO, the REIT is poised for growth, and we are confident in our ability to produce value for our shareholders."
Conference Call
A conference call and live audio webcast for analysts and interested listeners will be held Wednesday, August 11th at 9:00 a.m. (ET). The call-in numbers for participants are 647-427-7450 or 888-231-8191. In order to join this conference call, please provide the Conference ID Number 86605419.
Audio replay is available until August 17, 2010 by dialing 416-849-0833 or 1-800-642-1687 and entering access code 86605419.
The webcast can be accessed from the "Investor Information" page of the REIT's web site at www.tgareit.com.
About TransGlobe Apartment Real Estate Investment Trust
TransGlobe Apartment Real Estate Investment Trust is an unincorporated, open-ended real estate investment trust established under the laws of the Province of Ontario. The REIT was initially formed to indirectly acquire, 65 residential rental properties containing approximately 8,200 suites principally located in urban centres in Alberta, Ontario, Québec, New Brunswick and Nova Scotia that were previously owned or co-owned and operated by affiliates of TransGlobe Investment Management Ltd. ("TGIM"). TGIM and an affiliate administer and operate the assets of the REIT in order to support the REIT's external management structure.
Non-GAAP Financial Measures
NOI, FFO and AFFO do not have standardized meanings prescribed by GAAP and should not be construed as alternatives to net income/loss, cash flow from operating activities or other measures of financial performance calculated in accordance with GAAP. Such measures as computed by the REIT may differ from similar measures as reported by other trusts or companies in similar or different industries.
Management considers NOI to be an important measure of the REIT's operating performance and uses this measure to assess the REIT's property operating performance on an unlevered basis. FFO is a measure of operating performance based on the funds generated from the business of the REIT before reinvestment or provision for other capital needs. Management considers FFO to be an important measure of the REIT's operating performance and AFFO to be an important performance measure to determine the sustainability of future distributions paid to holders of trust REIT units after provision for maintenance capital expenditures. AFFO should not be interpreted as an indicator of cash generated from operating activities as it does not consider changes in working capital.
Forward-looking Statements
Certain statements contained in this press release constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking statements are provided for the purposes of assisting the reader in understanding the REIT's financial position and results of operations as at and for the periods ended on certain dates and to present information about management's current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. Forward-looking information may relate to the REIT's future outlook and anticipated events or results and may include statements regarding the financial position, business strategy, budgets, litigation, projected costs, capital expenditures, financial results, taxes, plans and objectives of or involving the REIT. Particularly, statements regarding future results, performance, achievements, prospects or opportunities for the REIT or the real estate industry are forward-looking statements. In some cases, forward-looking information can be identified by such terms such as "may", "might", "will", "could", "should", "would", "occur", "expect", "plan", "anticipate", "believe", "intend", "seek", "aim", "estimate", "target", "project", "predict", "forecast", "potential", "continue", "likely", "schedule", or the negative thereof or other similar expressions concerning matters that are not historical facts.
Forward-looking statements necessarily involve known and unknown risks and uncertainties, that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of factors, many of which, are beyond the REIT's control, affect the operations, performance and results of the REIT and its business, and could cause actual results to differ materially from current expectations of estimated or anticipated events or results. These factors include, but are not limited to, the risks discussed in the REIT's materials filed with Canadian securities regulatory authorities from time to time. The reader is cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements as there can be no assurance that actual results will be consistent with such forward-looking statements.
Information contained in forward-looking statements is based upon certain material assumptions that were applied in drawing a conclusion or making a forecast or projection, including management's perceptions of historical trends, current conditions and expected future developments, as well as other considerations that are believed to be appropriate in the circumstances, including the following: the Canadian economy will remain stable over the next 12 months; inflation will remain relatively low; interest rates will remain stable; conditions within the real estate market, including competition for acquisitions, will be consistent with the current climate; the Canadian capital markets will provide the REIT with access to equity and/or debt at reasonable rates when required; TGIM and its affiliates will continue their involvement with the REIT; and the risks identified or referenced above, collectively, will not have a material impact on the REIT. While management considers these assumptions to be reasonable based on currently available information, they may prove to be incorrect.
The forward-looking statements made in this press release relate only to events or information as of the date on which the statements are made in this press release. Except as specifically required by law, the REIT undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.
%SEDAR: 00029761E
For further information: TransGlobe Apartment Real Estate Investment Trust, Leslie Veiner, Chief Financial Officer, (905) 293-9400 ext. 1985, Email: [email protected]
Share this article