Canadian Net REIT Announces Its Results for the Quarter Ended March 31, 2022, and Q3 2022 Monthly Distributions

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Canadian Net Real Estate Investment Trust.
Canadian Net Real Estate Investment Trust.

MONTRÉAL, May 25, 2022 (GLOBE NEWSWIRE) -- (TSX-V: NET.UN) Canadian Net Real Estate Investment Trust (“Canadian Net” or the “Trust”) announces its results for the quarter ended March 31st, 2022, and monthly distributions for the months of July, August, and September 2022.

RESULTS

For the quarter ended March 31st, 2022, Canadian Net reported funds from operations per unit1 ("FFO per unit") of $0.151 compared to $0.140 per unit for the quarter ended March 31st, 2021, an increase of 8%. Funds from Operations1 (“FFO”) was $3,070,278, an increase of 26% relative to $2,433,267 in Q1 2021. The increase was primarily due to the impact of the newly acquired properties, partially offset by interest on mortgages associated with said properties.

During Q1 2022, the Trust’s property rental income was $5,431,695 compared to $4,453,791 in Q1 2021, an increase of 22%. Net Operating Income1 (“NOI”) was $4,207,759 compared to $3,279,414 in Q1 2021, an increase of 28%. The increases were primarily due to the impact of the newly acquired properties.

Canadian Net also recorded a net income attributable to unitholders of $1,480,986 compared to $223,673 in Q1 2021. The positive variance was primarily due to the impact of NOI1 from newly acquired properties, partially offset by interest on mortgages associated with said properties, as well as the change in fair value of investment properties.

DISTRIBUTIONS

Canadian Net announces that it will make monthly cash distributions of $0.0283 per unit, representing $0.34 per unit on an annualized basis, on July 29th, August 31st, and September 30th, 2022, to unitholders of record on July 15th, August 15th, and September 15th, 2022, respectively.

Jason Parravano, President and CEO says: “I am pleased to once again share with you another quarter of per unit FFO1 growth. 2022 is off to another great start, having already purchased 9 properties since the beginning of the year and continuing to grow the portfolio.”

The tables below represent other financial highlights as well as the reconciliations of certain non-IFRS measures for the periods ended March 31st, 2022, and its comparative period. This information should be read in conjunction with the Consolidated Financial Statements and MD&A for the quarter ended March 31st, 2022, and the Consolidated Financial Statements and MD&A for the quarter ended March 31st, 2021.


SUMMARY OF SELECTED FINANCIAL INFORMATION

 

3 months

 

Periods ended March 31

2022

2021

Δ

%

Financial info

 

 

 

 

Property rental income

5,431,695

4,453,791

977,904

 

22

%

Net income and comprehensive income

1,480,986

223,673

1,257,313

 

562

%

NOI (1)

4,207,759

3,279,414

928,345

 

28

%

FFO (1)

3,070,278

2,433,267

637,011

 

26

%

AFFO (1)

2,923,746

2,236,544

687,202

 

31

%

Investment properties

267,390,147

187,591,316

79,798,831

 

43

%

Adjusted investment properties (1)

314,071,396

225,561,827

88,509,569

 

39

%

Total assets

293,285,225

208,549,407

84,735,818

 

41

%

Mortgages

128,636,709

97,813,717

30,822,992

 

32

%

Long-term debt

60,000

75,000

(15,000

)

(20

%)

Current portion of mortgages and long term-debt

14,396,253

8,970,774

5,425,479

 

60

%

Credit facilities

6,115,000

1,050,000

5,065,000

 

482

%

Total convertible debentures

8,332,811

8,128,852

203,959

 

3

%

Total equity

131,130,975

89,408,345

41,722,630

 

47

%

Weighted average units o/s - basic

20,320,019

17,420,614

2,899,405

 

17

%

Amounts on a per unit basis

 

 

 

 

FFO(1)

0.151

0.140

0.011

 

8

%

AFFO(1)

0.144

0.128

0.016

 

12

%

Distributions

0.085

0.075

0.010

 

13

%

(1) This is a non-IFRS financial measure that does not have any standardized IFRS meaning and as such may not be comparable to other issuers. Refer to section “Non-IFRS financial measures”.


ADJUSTED INVESTMENT PROPERTIES

As at March 31

2022

2021

Δ

Investment Properties

 

 

 

Developed properties

267,390,147

187,591,316

43

%

 

267,390,147

187,591,316

43

%

Joint Venture Ownership(1)

 

 

 

Developed properties

43,776,289

35,035,830

25

%

Properties under development

2,904,960

2,934,681

(1

%)

Adjusted Investment Properties(2)

314,071,396

225,561,827

39

%

(1) Represents Canadian Net’s proportionate share

(2) This is a non-IFRS financial measure that does not have any standardized IFRS meaning and as such may not be comparable to other issuers. Refer to section “Non-IFRS financial                 measures”


RESULTS OF OPERATIONS

 

3 months

 

Periods ended March 31

2022

 

2021

 

 Δ

Rental Income

5,431,695

 

4,453,791

 

977,904

 

Operating costs

(1,223,936

)

(1,174,377

)

(49,559

)

Net Operating Income(1)

4,207,759

 

3,279,414

 

928,345

 

Share of net income (loss) from investments in joint ventures

1,056,100

 

(801,624

)

1,857,724

 

Increase/(decrease) in fair values of investment properties

(1,491,410

)

(1,450,766

)

(40,644

)

Financial expenses

1,668,936

 

298,748

 

1,370,188

 

Administrative expenses

237,279

 

205,432

 

31,847

 

Unit-based compensation

385,248

 

299,171

 

86,077

 

Net income and comprehensive income

1,480,986

 

223,673

 

1,257,313

 

FFO(1)

3,070,278

 

2,433,267

 

26

%

FFO per unit(1)

0.151

 

0.140

 

8

%

Weighted avg. units o/s

 

 

 

Basic

20,320,019

 

17,420,614

 

2,899,405

 

(1) This is a non-IFRS financial measure that does not have any standardized IFRS meaning and as such may not be comparable to other issuers. Refer to section “Non-IFRS financial measures”


FUNDS FROM OPERATIONS

 

3 months

 

Periods ended March 31

2022

 

2021

 

 Δ

Net income attributable to unitholders

1,480,986

 

223,673

 

1,257,313

 

Δ in value of investment properties

1,491,410

 

1,450,766

 

40,644

 

Δ in value of investment properties in joint ventures

(633,855

)

1,165,947

 

(1,799,802

)

Unit-based compensation

385,248

 

299,171

 

86,077

 

Δ fair value adjustments on derivative financial instruments

339,006

 

(713,377

)

1,052,383

 

Accretion of lease payments

7,483

 

7,087

 

396

 

FFO(1)

3,070,278

 

2,433,267

 

26

%

FFO per unit(1)

0.151

 

0.140

 

8

%

Distributions

1,724,930

 

1,307,150

 

417,780

 

Distributions per unit

0.085

 

0.075

 

13

%

FFO per unit(1) - after distributions

0.066

 

0.065

 

2

%

Distributions per unit as a % of FFO per unit(1)

56

%

54

%

2

%

Weighted avg. units o/s

 

 

 

Basic

20,320,019

 

17,420,614

 

2,899,405

 

(1) This is a non-IFRS financial measure that does not have any standardized IFRS meaning and as such may not be comparable to other issuers. Refer to section “Non-IFRS financial measures”


ADJUSTED FUNDS FROM OPERATIONS

 

3 months

 

Periods ended March 31

2022

 

2021

 

 Δ

FFO (1)

3,070,278

 

2,433,267

 

637,011

 

Amortization of finance charges included in interest expense

-

 

-

 

-

 

Straight-line rent adjustment(2)

(117,820

)

(148,290

)

30,470

 

Maintenance/cap-ex on existing properties

(28,712

)

(48,433

)

19,721

 

Leasing costs on existing properties

-

 

-

 

-

 

Debt extinguishment penalties

-

 

-

 

-

 

AFFO(1)

2,923,746

 

2,236,544

 

31

%

AFFO per unit(1)

0.144

 

0.128

 

12

%

Distributions per unit

0.085

 

0.075

 

13

%

AFFO per unit(1) - after distributions

0.059

 

0.053

 

11

%

Distributions per unit(1) as a % of AFFO per unit(1)

59

%

58

%

1

%

Weighted avg. units o/s

 

 

 

Basic

20,320,019

 

17,420,614

 

2,899,405

 

(1) This is a non-IFRS financial measure that does not have any standardized IFRS meaning and as such may not be comparable to other issuers. Refer to section “Non-IFRS financial measures”

(2) Adjusted for proportionate share of equity accounted investments


About Canadian Net –
Canadian Net Real Estate Investment Trust is an open-ended trust that acquires and owns high-quality triple net and management-free commercial real estate properties.

Non-IFRS Financial Measures – The Trust’s consolidated financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS"). In this press release, as a complement to results provided in accordance with IFRS, the Trust discloses and discusses certain non-IFRS financial measures: FFO, FFO per unit, AFFO, AFFO per unit, NOI, and Adjusted Investment Properties. These non-IFRS measures are not defined by IFRS, do not have a standardized meaning, and may not be comparable with similar measures presented by other issuers. Canadian Net has presented such non-IFRS measures as management of the Trust believes they are relevant measures of Canadian Net's underlying operating performance and debt management. Non-IFRS measures should not be considered as alternatives to net income, cash generated from (utilized in) operating activities, or comparable metrics determined in accordance with IFRS as indicators of the Trust's performance, liquidity, cash flow, and profitability. For a full description of these measures and, where applicable, a reconciliation to the most directly comparable measure calculated in accordance with IFRS, please refer to the "Non-IFRS Financial Measures " section in Canadian Net’s management's discussion and analysis for the three-month period ended March 31, 2022, available under Canadian Net's profile on SEDAR at www.sedar.com.

Forward-Looking Statements - This press release contains forward-looking statements and information as defined by applicable securities laws. Canadian Net warns the reader that actual events may differ materially from current expectations due to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated in such statements. Among these include the risks related to economic conditions, the risks associated with the local real estate market, the dependence to the financial condition of tenants, the uncertainties related to real estate activities, the changes in interest rates, the availability of financing in the form of debt or equity, the effects related to the adoption of new IFRS standards, as well as other risks and factors described from time to time in the documents filed by Canadian Net with securities regulators, including the management report. Canadian Net does not update or modify its forward-looking statements even if future events occur or for any other reason, unless required by law or any regulatory authority.

Neither the TSX Venture Exchange Inc., nor its Regulatory Services Provider (as that term is defined in the Policy of the TSX Venture Exchange and its Regulatory Services Provider) accepts any responsibility for the adequacy or accuracy of this release.

The March 31st, 2022, financial statements and management discussion & analysis of Canadian Net may be viewed on SEDAR at www.sedar.com.

For further information please contact Jason Parravano at (450) 536-5328.

1 This is a non-IFRS financial measure that does not have any standardized IFRS meaning and as such may not be comparable to other issuers. Refer to section “Non-IFRS Financial Measures”.


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