U.S. Markets open in 20 mins

Fronsac Announces Its Results For The Quarter Ended September 30, 2019 And An Increase Of 15.1% In Its 2020 Per Unit Distribution

MONTREAL, Nov. 08, 2019 (GLOBE NEWSWIRE) -- (TSX-V:FRO.UN) Fronsac Real Estate Investment Trust (“Fronsac REIT” or “Fronsac”) announces its results for the quarter ended September 30th, 2019 and, for an eight consecutive year, an increase in its annual distribution as well as distributions for the months of January, February and March 2020.

Distributions
Starting in January 2020, the annual distribution will go from 2.220¢ to 2.555¢ per unit, representing an increase of 15.1%. The monthly distributions will be of 0.213¢ per unit. This represents a 104% total growth since Fronsac’s first distributions in 2012.

Fronsac also announces that it will make monthly cash distributions of 0.213¢ per unit, representing 2.555¢ per unit on an annualized basis, on January 31st, February 28th and March 31st, 2020 to unitholders of record on January 15th, February 14th and March 16th, 2020, respectively.

For the quarter ended September 30, 2019, Fronsac reported recurring funds from operations ("Recurring FFO") per unit of 1.02¢ compared to 0.95¢ per unit for the quarter ended September 30, 2018, an increase of 8%. Recurring FFO was $1,197,449, an increase of 37% ($871,219 in Q3 2018). During Q3 2019, the Trust’s property rental income was $2,458,451 compared to $1,663,373 in Q3 2018, an increase of 48%. NOI (Net operating Income) was $1,881,747 compared to $1,324,647 in Q3 2018, an increase of 42%. Fronsac recorded a net income attributable to unitholders of $3,891,506, or 3.33¢ per unit, compared to a net income of $544,021, or 0.59¢ per unit, in Q3 2018.

For the 9-month period ended September 30, 2019, Fronsac reported Recurring FFO per unit of 3.04¢ compared to 2.76¢ per unit for the same period in 2018, an increase of 10%. Recurring FFO was $3,319,677, an increase of 38% ($2,413,136 for the same period in 2018). During the 9-month period ended September 30, 2019, the Trust’s property rental income was $6,650,030 compared to $4,556,093 for the same period in 2018, an increase of 46%. Net operating Income was $5,142,963 compared to $3,623,014 for the same period in 2018, an increase of 42%. Fronsac recorded a net income attributable to unitholders of $4,088,070, or 3.74¢ per unit, compared to a net income of $2,196,171, or 2.51¢ per unit for the same period in 2018.

Jason Parravano President and CEO said: “We are pleased to share with everyone our results for Q3 2019. Our per unit growth has allowed us to increase once again our distributions for the following year, and this for the 8th year in a row. During the quarter, we also continued to add to our portfolio and to diversify our tenant base.”

The tables below represent other financial highlights as well as the reconciliation from net income to FFO for the periods ended September 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 September 30th, 2019 and September 30th, 2018.

             
SUMMARY OF SELECTED ANNUAL INFORMATION          
  9 months        
Periods ended September 30 2019 2018     Δ %
Financial info            
Property rental income 6,650,030 4,556,093     2,093,937 46 %
Total revenue 6,650,030 4,571,093     2,078,937 45 %
NOI (1) 5,142,963 3,623,014     1,519,949 42 %
FFO (1) 3,319,677 2,428,136     891,541 37 %
Recurring FFO (1) 3,319,677 2,413,136     906,541 38 %
AFFO (1) 3,276,191 2,115,047     1,161,144 55 %
EBITDA (1) 4,887,851 3,372,480     1,515,371 45 %
Investment properties (2) 133,413,308 99,264,996     34,148,312 34 %
Total assets 126,614,742 96,863,007     29,751,735 31 %
Total mortgage/loans/long term debt (3) 60,553,952 47,168,403     13,385,549 28 %
(including revolving line of credit) 68,379,232 47,568,403     20,810,829 44 %
Total convertible debentures 2,967,498 1,576,413     1,391,085 88 %
Total equity 53,031,403 45,899,465     7,131,938 16 %
Weighted average units o/s - basic 109,356,605 87,649,966     21,706,639 25 %
Amounts on a per unit basis            
FFO 0.0304 0.0277     0.0027 10 %
Recurring FFO 0.0304 0.0275     0.0028 10 %
AFFO 0.0300 0.0241     0.0058 24 %
Distributions 0.0167 0.0151     0.0015 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 September 30 2019 2018     Δ   2019 2018     Δ
Net income (loss) attributable                      
to unitholders 3,891,506 544,021     3,347,485   4,088,070 2,196,171     1,891,899
Debenture issuance costs - 53,171     (53,171)   30,660 53,171     (22,511)
Δ in value of investment properties (2,689,721) 24,924     (2,714,645)   (1,056,922) (145,781)     (911,141)
Δ in value of investment                      
properties in joint ventures 79,560 124,712     (45,152)   156,687 156,423     264
Unit based compensation (275) 17,600     (17,875)   181,305 80,510     100,795
Δ in liability component of                      
convertible debentures (20,084) 10,130     (30,214)   (983) 10,882     (11,865)
Δ in fair value of derivative                      
financial instruments (92,875) 94,260     (187,135)   (106,530) 71,720     (178,250)
Accretion of lease payments 29,338 -     29,338   29,338 -     29,338
Income taxes - 2,401     (2,401)   (1,948) 5,040     (6,988)
FFO(1) - basic 1,197,449 871,219     37%   3,319,677 2,428,136     37%
FFO per unit - basic 0.0102 0.0095     8%   0.0304 0.0277     10%
Interest paid on convertible                      
debentures (if dilutive) - -     -   - -     -
FFO - diluted 1,197,449 871,219     37%   3,319,677 2,428,136     37%
FFO per unit - diluted 0.0102 0.0093     10%   0.0304 0.0269     13%
Recurring FFO - basic 1,197,449 871,219     37%   3,319,677 2,413,136     38%
Recurring FFO per unit - basic 0.0102 0.0095     8%   0.0304 0.0275     10%
Distributions 649,344 458,528     190,816   1,805,493 1,322,097     483,396
Distributions per unit 0.0056 0.0050     12%   0.0167 0.0151     10%
FFO - basic after distributions 0.0047 0.0045     0.0002   0.0137 0.0126     0.0011
Recurring FFO - basic after distributions 0.0047 0.0045     0.0002   0.0137 0.0124     0.0013
Distributions as a % of                      
FFO - basic 54% 53%     1%   55% 55%     -
Distributions as a % of                      
Recurring FFO - basic 54% 53%     1%   55% 55%     -
Weighted avg. units o/s                      
Basic 117,014,413 91,554,473     25,459,940   109,356,605 87,649,966     21,706,639
Diluted 117,014,413 94,059,156     22,955,257   109,356,605 90,154,649     19,201,956
(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 September 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.