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Tuesday, May 12, 2009
Huntingdon REIT reports 2009 first quarter results
Comtex
WINNIPEG, May 12, 2009 (Canada NewsWire via COMTEX) ----Huntingdon Real Estate Investment Trust ("HREIT") (TSX: HNT.UN) today reported its operating results for the quarter ended March 31, 2009. The following comments in regard to the financial position and operating results of HREIT should be read in conjunction with the March 31, 2009 Management Discussion and Analysis and the financial statements for the quarter ended March 31, 2009, which may be obtained from the HREIT website at www.hreit.ca or the SEDAR website at www.sedar.com.
During 2009, HREIT is focused on attaining improved results through a number of initiatives, including the divestiture of selected properties, the paydown of higher cost interim debt and the completion of property renovations and leasehold improvements. HREIT is also striving to attain improved net operating income results from its real estate portfolio in an uncertain economic environment.
During the first quarter of 2009, HREIT incurred a loss from continuing operations before taxes of approximately $3.3 million, compared to a loss from continuing operations before taxes of approximately $1.9 million during the first quarter of 2008 and $2.5 million during the fourth quarter of 2008. The increase in the loss, in comparison to both the first and fourth quarters of 2008, is mainly due to a decrease in the net operating income of the retail property portfolio as a result of a reduced occupancy level and an increase in operating costs.
The decrease in net operating income was also the main contributing factor in the decrease in cash from operating activities during the first quarter of 2009. In comparison to the first quarter of 2008, cash from operating activities, before lease acquisition costs and charges in non-cash operating items, decreased by approximately $1.3 million, during the first quarter of 2009.
On May 1, 2009, HREIT completed the sale of Cityplace, at a price of $81.5 million, and also sold the retail property at 1250 Steeles Avenue in Brampton, Ontario, at a price of $5.3 million. The sale of the two properties and, in particular, the sale of Cityplace, enabled HREIT to repay $59.3 million of mortgage debt, $21.5 million of interim financing and improve the working capital position.
<< FINANCIAL AND OPERATING SUMMARY Three Months Ended March 31 ----------------------------- 2009 2008 ------------ ------------ KEY PERFORMANCE INDICATORS Operating results Total revenue 16,538,189 17,286,738 Net operating income 8,457,537 9,822,612 Income (loss) from continuing operations before income tax recovery (expense) (3,341,278) (1,859,724) Income (loss) from continuing operations (2,721,672) (1,129,160) Income (loss) for the period (2,809,303) (1,965,345) Cash flows Cash inflow (outflow) from operating activities 1,825,413 1,767,180 Funds from Operations (FFO) 906,412 2,816,011 Adjusted Funds from Operations (AFFO) 1,229,979 1,366,843 Distributable income 1,753,093 3,078,770 Operations Quarter end occupancy rate 93% 92% Increase (decrease) in same property operating income (15)% (1)% Capital reinvestment Additions to building and equipment 53,905 504,256 Additions to properties under development - 2,578,872 Lease acquisition costs 557,817 1,503,346 DISTRIBUTIONS Amount - total - 5,061,040 - per unit - 0.07 Financing Mortgage loan debt to gross book value ratio 54% 59% Weighted average interest rate of long-term debt 5.83% 6.44% PER UNIT AMOUNTS Three Months Ended March 31 2009 2008 ----------------- ----------------- Basic Diluted Basic Diluted ------- --------- ------- --------- Operating income 0.116 0.116 0.136 0.136 Income (loss) from continuing operations before income tax recovery expense (0.046) (0.046) (0.026) (0.026) Income (loss) from continuing operations (0.037) (0.037) (0.016) (0.016) Income (loss) for the period (0.038) (0.038) (0.027) (0.027) Funds from Operations (FFO) 0.012 0.012 (0.039) (0.039) Adjusted Funds from Operations (AFFO) 0.017 0.017 (0.020) (0.020) Distributable income 0.024 0.024 (0.043) (0.043) First Quarter 2009 Compared to First Quarter 2008 - NOI decreased by approximately $1.4 million or 14%, mainly due to a decrease in NOI from the retail property portfolio, as a result of a decrease in the occupancy level, and an increase in operating costs. - Loss from continuing operations before taxes increased by approximately $1.5 million primarily due to the decrease in NOI. - After considering the decrease in future income tax recoveries of $111,000 and the decrease in the loss from discontinued operations of $749,000, the overall loss increased by $844,000. - Cash provided by operating activities, excluding changes in non-cash operating items decreased by $353,000. The decrease mainly reflects the decrease in NOI, largely offset by a decrease in lease acquisition costs of $946,000. - FFO decreased by $1.9 million or 68% during the first quarter of 2009, compared to the first quarter of 2008, while AFFO decreased by $68,152 or 5%. On a per unit basis, FFO decreased by $0.026 per unit, while AFFO decreased by $0.002 per unit. - Distributable Income decreased by $1.3 million or 42%, during the first quarter of 2009, compared to the first quarter of 2008 Comparison to Preceding Quarter ------------------------------------------------------------------------- Three Months Ended Effect on --------------------------- Income March 31, December 31, Increase 2008 2008 (Decrease) ----------------------------------------- Total revenues $ 16,538,189 $ 17,832,706 $ (1,294,517) Total operating and property management costs 8,080,652 7,986,659 (93,993) ------------- ------------- ------------- Net operating income 8,457,537 9,846,047 (1,388,510) Trust expenses 790,473 718,148 (72,325) Strategic review expense - 382,574 382,574 ------------- ------------- ------------- Income before financing expense, amortization, discontinued operations and taxes 7,667,064 8,745,325 (1,078,261) Financing expense 6,673,021 6,731,264 58,243 ------------- ------------- ------------- Income before amortization, discontinued operations and taxes 994,043 2,014,061 (1,020,018) Amortization 4,335,321 4,569,535 234,214 ------------- ------------- ------------- Loss from continuing operations before income tax recoveries/expense (3,341,278) (2,555,474) (785,804) Income tax recoveries 619,606 (1,014,436) 1,634,042 ------------- ------------- ------------- Loss from continuing operations (2,721,672) (3,569,910) 848,238 Income from discontinued operations (87,631) (105,035) 17,404 ------------- ------------- ------------- Income (loss) for the period $ (2,809,303) $ (3,674,945) $ 865,642 ------------- ------------- ------------- ------------- ------------- ------------- >>
Excluding income tax recoveries and discontinued operations, HREIT incurred a loss of approximately $3.3 million during the first quarter of 2009, compared to a loss of approximately $2.5 million in the fourth quarter of 2008, representing an increase in the loss of approximately $800,000. The increase in the loss mainly reflects a decrease in net operating income, partially offset by a decrease in strategic review expense and amortization charges.
After including income tax recoveries and discontinued operations, HREIT completed the three month period ended March 31, 2009 with a loss of $2.8 million compared to a loss of $3.6 million during the fourth quarter of 2008.
Outlook for 2009
In 2009, HREIT is focused on attaining improved results through a number of initiatives, including the divestiture of selected properties, repayment of higher cost interim debt, and the projected completion of over $12 million in property improvements and upgrades
With only $2.3 million of higher rate interim financing mortgages remaining, HREIT expects to achieve a substantial reduction in debt service costs during the remainder of 2009. The reduction in debt service costs, combined with a budgeted improvement in net operating income from continuing properties and the completion of value-added capital expenditures, should result in an improvement in overall operating results, commencing in the second quarter of 2009. Additional property sales are targeted for the second and third quarter of the year, which should further strengthen the overall financial position.
<< About HREIT ----------- HREIT is a real estate investment trust, which is listed on the Toronto Stock Exchange under the symbols HNT.UN (Trust Units) and HNT.DB.C (Series C Convertible Debentures). HREIT owns 75 income producing office, industrial, retail and standalone parking lot properties that have a total gross leaseable owned area of 4.9 million square feet; two land parcels held for development and other development and expansion opportunities within the existing portfolio. The properties are located in Manitoba, Ontario, Saskatchewan, Alberta, British Columbia and Northwest Territories. HREIT also owns CRESI Inc., a third party property management business. For further information on HREIT, please visit our website at www.hreit.ca. This press release contains certain statements that could be considered as forward-looking information. The forward-looking information is subject to certain risks and uncertainties, which could result in actual results differing materially from the forward-looking statements. The Toronto Stock Exchange has not reviewed or approved the contents of this press release and does not accept responsibility for the adequacy or accuracy of this press release. >>
SOURCE: Huntingdon Real Estate Investment Trust
Arni Thorsteinson, President & Chief Executive Officer, or Gino Romagnoli, Investor Relations, Tel: (204) 475-9090, Fax: (204) 452-5505, Email: info@hreit.ca
Copyright (C) 2009 CNW Group. All rights reserved.
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