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Fronsac Announces Its Results for the Quarter Ended June 30, 2019 and Monthly Distributions for the Months of October, November and December 2019

MONTREAL, Aug. 23, 2019 (GLOBE NEWSWIRE) -- (TSX-V:FRO.UN) Fronsac Real Estate Investment Trust (“Fronsac REIT” or “Fronsac”) announces its results for the quarter ended June 30, 2019 and that it will make monthly cash distributions of 0.185¢ per unit, representing 2.220¢ per unit on an annualized basis, on October 31st, November 29th and December 31st, 2019 to unitholders of record on October 15th, November 15th and December 16th, 2019, respectively.

For the quarter ended June 30, 2019, Fronsac reported recurring funds from operations ("Recurring FFO") per unit of 1.03¢ compared to 0.89¢ per unit for the quarter ended June 30, 2018, an increase of 16%. Recurring FFO was $1,121,743, an increase of 47% ($764,867 in Q2 2018). During Q2 2019, the Trust’s property rental income was $2,192,484 compared to $1,530,968 in Q2 2018, an increase of 43%. NOI (Net operating Income) was $1,704,459 compared to $1,209,474 in Q2 2018, an increase of 41%. Fronsac recorded a net income attributable to unitholders of $145,694, or 0.13¢ per unit, compared to a net income of $278,795, or 0.33¢ per unit, in Q2 2018.

For the 6-month period ended June 30, 2019, Fronsac reported Recurring FFO per unit of 2.01¢ compared to 1.80¢ per unit for the same period in 2018, an increase of 12%. Recurring FFO was $2,122,227, an increase of 38% ($1,541,916 for the same period in 2018). During the 6-month period ended June 30, 2019, the Trust’s property rental income was $4,191,579 compared to $2,892,720 for the same period in 2018, an increase of 45%. Net operating Income was $3,261,215 compared to $2,298,367 for the same period in 2018, an increase of 42%. Fronsac recorded a net income attributable to unitholders of $196,564, or 0.19¢ per unit, compared to a net income of $1,652,149, or 1.93¢ per unit for the same period in 2018.

Jason Parravano President and CEO said: “I am pleased to share with you our results for the past 6 months. We once again have achieved growth in our per unit FFO and have continued to grow our portfolio. We had a busy second quarter with the closing of a $9.9M private placement in May and subsequent capital deployment to add Walmart, Dollarama and Laurentian Bank to our tenant roster.”

The tables below represent other financial highlights as well as the reconciliation from net income to FFO for the periods ended June 30th, 2019 and its comparative period. This information should be read in conjunction with the Consolidated Financials Statements and MD&A for the quarters ended June 30th, 2019 and June 30th, 2018.

 
SUMMARY OF SELECTED ANNUAL INFORMATION
  6 months        
Periods ended June 30 2019 2018     Δ %
Financial info            
Property rental income 4,191,579 2,892,720     1,298,859 45%
Total revenue 4,191,579 2,907,720     1,283,859 44%
NOI (1) 3,261,215 2,298,367     962,848 42%
FFO (1) 2,122,227 1,556,916     565,311 36%
Recurring FFO (1) 2,122,227 1,541,916     580,311 38%
AFFO (1) 2,086,315 1,555,647     530,668 34%
EBITDA (1) 3,014,265 2,101,447     912,818 43%
Investment properties (2) 123,749,775 88,701,506     35,048,269 40%
Total assets 117,063,470 83,966,065     33,097,405 39%
Total mortgage/loans/long term debt (3) 61,397,626 44,861,860     16,535,766 37%
Total convertible debentures 3,237,582 251,333     2,986,249 1,188%
Total equity 49,508,119 37,537,332     11,970,787 32%
Weighted average units o/s - basic 105,464,238 85,665,355     19,798,883 23%
Amounts on a per unit basis            
FFO 0.0201 0.0182     0.0019 10%
Recurring FFO 0.0201 0.0180     0.0021 12%
AFFO 0.0198 0.0182     0.0016 9%
Distributions 0.0111 0.0101     0.0010 10%
             
(1) Non-IFRS financial measures
(2) Includes value of investment properties owned through joint ventures
(3) Excludes convertible debentures
 


RECONCILIATION OF NET INCOME TO FFO
  3 months         6 months      
Periods ended June 30 2019 2018     Δ   2019 2018     Δ
Net income (loss) attributable to unitholders 145,694 278,795     (133,101)   196,564 1,652,149     (1,455,585)
Debenture issuance costs 30,660 -     30,660   30,660 -     30,660
Δ in value of investment properties 790,562 504,122     286,440   1,632,799 (170,705)     1,803,504
Δ in value of investment properties in joint ventures 975 (28,778)     29,753   77,126 31,711     45,415
Unit based compensation 118,400 21,830     96,570   181,580 62,910     118,670
Δ in liability component of convertible debentures 31,850 (3,381)     35,231   19,101 752     18,349
Δ in fair value of derivative financial instruments 5,550 (10,360)     15,910   (13,655) (22,540)     8,885
Income taxes (1,948) 2,639     (4,587)   (1,948) 2,639     (4,587)
FFO(1) - basic 1,121,743 764,867     47%   2,122,227 1,556,916     36%
FFO per unit - basic 0.0103 0.0089     16%   0.0201 0.0182     10%
Interest paid on convertible debentures (if dilutive) 7,500 -     7,500   49,620 7,500     42,120
FFO - diluted 1,129,243 764,867     48%   2,171,847 1,564,416     39%
FFO per unit - diluted 0.0099 0.0089     11%   0.0197 0.0181     9%
Recurring FFO - basic 1,121,743 764,867     47%   2,122,227 1,541,916     38%
Recurring FFO per unit - basic 0.0103 0.0089     16%   0.0201 0.0180     12%
Distributions 592,324 431,785     160,540   1,156,149 863,569     292,580
Distributions per unit 0.0056 0.0050     12%   0.0111 0.0101     10%
FFO - basic after distributions 0.0047 0.0039     0.0008   0.0090 0.0081     0.0009
Recurring FFO - basic after distributions 0.0047 0.0039     0.0008   0.0090 0.0079     0.0011
Distributions as a % of FFO - basic 54% 56%     (2%)   55% 55%     -
Distributions as a % of Recurring FFO - basic 54% 56%     (2%)   55% 56%     (1%)
Weighted avg. units o/s                      
Basic 109,279,842 85,671,543     23,608,299   105,464,238 85,665,355     19,798,883
Diluted 114,157,122 85,671,543     28,485,579   110,341,518 86,246,750     24,094,768
                       
(1) FFO is a Non-IFRS financial measure
 

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

Forward-Looking Statements - This press release contains forward-looking statements and information as defined by applicable securities laws. Fronsac 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 Fronsac with securities regulators, including the management report. Fronsac 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 Provide) accepts any responsibility for the adequacy or accuracy of this release.

The June 30th, 2019 financial statements and management discussion & analysis of Fronsac REIT may be viewed on SEDAR at www.sedar.com.

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