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Second Quarter 2019 Earnings Report

MEXICO CITY, July 25, 2019 (GLOBE NEWSWIRE) -- Terrafina® (“TERRA” or “the Company”) (BMV:TERRA13), a leading Mexican industrial real estate investment trust (“FIBRA”), externally advised by PGIM Real Estate and dedicated to the acquisition, development, leasing and management of industrial real estate properties in Mexico, announced today its second quarter 2019 (2Q19) earnings results.

The figures in this report have been prepared in accordance with International Financial Reporting Standards (“IFRS”). Figures presented in this report are presented in millions of Mexican pesos and millions of U.S. dollars, unless otherwise stated. Additionally, figures may vary due to rounding. Terrafina’s financial results included in this report are unaudited. As a result, the mentioned figures in this financial report are preliminary figures and could be adjusted in the future.

This document may include forward-looking statements that may imply risks and uncertainties. Terms such as "estimate", "project", "plan", "believe", "expect", "anticipate", "intend", and other similar expressions could be construed as previsions or estimates. Terrafina warns readers that declarations and estimates mentioned in this document, or realized by Terrafina’s management imply risks and uncertainties that could change in function of various factors that are out of Terrafina’s control. Future expectations reflect Terrafina’s judgment at the date of this document. Terrafina reserves the right or obligation to update the information contained in this document or derived from this document. Past or present performance is not an indicator of future performance.

Operating and Financial Highlights as of June 30, 2019

Operating

  • As of June 30, 2019, the occupancy rate was 95.5%, unchanged compared to the second quarter of 2018 (2Q18). Additionally, considering signed letters of intent (LOI), occupancy for 2Q19 was 96.3%.
     
  • Annualized average leasing rate per square foot was US$5.18 in 2Q19, a 2.0% or US$0.11 increase compared to 2Q18.
     
  • Terrafina reported a total of 41.7 million square feet (msf) of Gross Leasable Area (GLA) comprised of 288 properties and 293 tenants.
     
  • 2Q19 leasing activity totaled 3.2 msf, of which 29.4% corresponded to new leases, 18.8% to lease renewals and 51.9% to early renewals. Leasing activity was mainly concentrated in the Aguascalientes, San Luis Potosi, Ramos Arizpe, Chihuahua, Monterrey, Silao, Ciudad Juarez, Huehuetoca, Apodaca, Toluca, Cuautitlan Izcalli, Tijuana and Hermosillo markets.

Financial

  • 2Q19 rental revenues reached US$47.3 million, a 0.5% or US$0.2 million decrease compared to 2Q18.
     
  • 2Q19 Net Operating Income (NOI) was US$47.2 million, a 1.4% or US$0.6 million decrease compared to 2Q18.  NOI margin reached 94.1%, a 76 basis point decrease compared to 2Q18.
     
  • 2Q19 EBITDA reached US$42.2 million, a decrease of 3.1% or US$1.4 million compared to 2Q18. The EBITDA margin for 2Q19 was 84.2%, a 222 basis point decrease compared to 2Q18.
     
  • 2Q19 adjusted funds for operations (AFFO) reached US$25.1 million, a decrease of 12.7% or US$3.7 million compared to 2Q18. The AFFO margin for 2Q19 was 50.2%, a 655 basis point decrease compared to 2Q18.
     
  • 2Q19 distributions totaled US$25.1 million. As a result, Terrafina will distribute Ps.0.6083 per CBFI (US$0.0318 per CBFI) for distributions corresponding to the period from April 1 to June 30, 2019.
     
  • The annualized distribution of 2Q19 was US$0.1271. Considering the average share price for the quarter of US$1.59 (Ps.30.46), Terrafina’s dividend yield for the quarter was 8.0%.

About Terrafina
Terrafina (BMV:TERRA13) is a Mexican real estate investment trust formed primarily to acquire, develop, lease and manage industrial real estate properties in Mexico. Terrafina’s portfolio consists of attractive, strategically located warehouses and other light manufacturing properties throughout the Central, Bajio and Northern regions of Mexico. It is internally managed by highly-qualified industry specialists and externally advised by PGIM Real Estate.

Terrafina owns 299 real estate properties, including 288 developed industrial facilities with a collective GLA of approximately 41.7 million square feet and 11 land reserve parcels, designed to preserve the organic growth capability of the portfolio.

Terrafina’s objective is to provide attractive risk-adjusted returns for the holders of its certificates through stable distributions and capital appreciations. Terrafina aims to achieve this objective through a successful performance of its industrial real estate and complementary properties, strategic acquisitions, access to a high level of institutional support, and to its management and corporate governance structure. For more information, please visit www.terrafina.mx

About PGIM Real Estate
PGIM, the global investment management business of Prudential Financial, Inc. (NYSE: PRU), is one of the largest real estate investment managers in the world, with more than $US171.2 billion1 in gross real estate assets under management and administration, as of 31 March 2019. Through its PGIM Real Estate and PGIM Real Estate Finance businesses, PGIM leverages a 140-year history of real estate lending on behalf of institutional and middle-market borrowers2, a 49-year legacy of investing in commercial real estate on behalf of institutional investors, and the deep local knowledge and expertise of professionals in 31 cities around the world.

PGIM Real Estate, the real estate investment management business of PGIM, has been redefining the real estate investing landscape since 1970. Combining insights into macroeconomic trends and global real estate markets with excellence of execution and risk management, PGIM Real Estate’s tenured team offers to its global clients a broad range of real estate equity, debt, and securities investment strategies that span the risk-return spectrum and geographies. For more information, visit pgimrealestate.com.

1AUA equals $US33.7 billion.
2Includes legacy lending through PGIM’s parent company, Prudential Financial, Inc.

About Prudential Financial, Inc.
Prudential Financial, Inc. (PRU), a financial services leader with more than US$1.5 trillion of assets under management as of March 31, 2019, has operations in the United States, Asia, Europe, and Latin America. Prudential’s diverse and talented employees are committed to helping individual and institutional customers grow and protect their wealth through a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds and investment management. In the U.S., Prudential’s iconic Rock symbol has stood for strength, stability, expertise and innovation for more than a century. For more information, please visit www.news.prudential.com

Forward Looking Statements
This document may include forward-looking statements that may imply risks and uncertainties. Terms such as "estimate", "project", "plan", "believe", "expect", "anticipate", "intend", and other similar expressions could be construed as previsions or estimates. Terrafina warns readers that declarations and estimates mentioned in this document, or realized by Terrafina’s management imply risks and uncertainties that could change in function of various factors that are out of Terrafina’s control. Future expectations reflect Terrafina’s judgment at the date of this document. Terrafina reserves the right or obligation to update the information contained in this document or derived from this document. Past or present performance is not an indicator to anticipate future performance.

Conference Call

Terrafina
(BMV:TERRA13)
Cordially invites you to participate in its
Second Quarter 2019 Results

Friday, July 26, 2019
11:00 a.m. Eastern Time
10:00 a.m. Central Time

***
To access the call, please dial:
from within the U.S. +1-877-407-3982
from outside the U.S. +1-201-493-6780
from Mexico (toll free) 01-800-522-0034
Conference ID Number: 13692012

Audio Webcast Link: http://public.viavid.com/index.php?id=135048

  Conference Replay
U.S. +1-844-512-2921
International (outside the US) +1-412-317-6671
Passcode: 13692012

For the full version of this report please visit: www.terrafina.mx under the Investors section or contact:

Francisco Martinez, IRO
Terrafina
Tel: +52 (55) 5279-8107
Correo: francisco.martinez@terrafina.mx

Ana María Ybarra
Miranda IR
Tel: +52 1 (55) 3660-4037
Correo: ana.ybarra@miranda-ir.com