Morguard Corporation Announces 2010 Second Quarter Results and Regular Eligible Dividend
Aug 5, 2010
TSX: MRC
MISSISSAUGA, ON, Aug. 5 /CNW/ - Morguard Corporation (TSX: MRC) announced its financial results for the three months ended June 30, 2010.
HIGHLIGHTS
- Total revenues for the three months ended June 30, 2010, were
$87.1 million compared to $86.0 million for the same period in 2009;
- Net operating income in Q2 2010 increased to $38.9 million compared to
$37.7 million in Q2 2009;
- Net income in Q2 2010 totalled $17.3 million compared to $6.7 million
in 2009;
- Funds from operations in Q2 2010 are unchanged at $28.7 million, or
$2.13 per share, compared to $28.7 million, or $2.04 per share in
2009;
- Sold a 50% interest in a retail shopping centre located in Grande
Prairie, Alberta, to Morguard REIT realizing a pre-tax gain on sale of
$9.7 million; and
- On July 30, 2010, the Company and Morguard REIT, acquired an office
property and excess land located in Montreal, Quebec for a purchase
price of $165 million (100%). The acquisition was funded by cash and a
ten year mortgage payable of $88 million (100%) at an interest rate of
5.475%. The Company's ownership in the acquisition is a 50% interest.
FINANCIAL HIGHLIGHTS
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Three months ended Six months ended
June 30 June 30
(in thousands of dollars) 2010 2009 2010 2009
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Income from real estate
properties $69,454 $70,118 $136,708 $142,178
Management and advisory fee
revenue 16,549 14,630 30,696 29,355
Sales of product and land 1,099 1,293 2,309 2,539
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Total revenues $87,102 $86,041 $169,713 $174,072
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Income from real estate
properties $69,454 $70,118 $136,708 $142,178
Property operating expense (30,570) (32,442) (62,543) (66,344)
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Net operating income $38,884 $37,676 $74,165 $75,834
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Funds from operations $28,663 $28,666 $52,553 $56,239
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Net income $17,348 $6,723 $21,812 $11,552
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Income per share
Basic - continuing
operations $1.29 $0.47 $1.58 $0.81
Diluted - continuing
operations $1.29 $0.47 $1.58 $0.81
Basic - net income $1.29 $0.48 $1.59 $0.82
Diluted - net income $1.29 $0.48 $1.59 $0.82
NET INCOME
Net income for the three months ended June 30, 2010, was $17.3 million
($1.29 per share) compared to $6.7 million ($0.48 per share) in 2009. The
increase in net income of $10.6 million was primarily due to gain on sale of
50% interest in Prairie Mall, Grande Prairie, Alberta, in the amount of $9.7
million and an increase in management and advisory fee revenue partially
offset by an increase in current income tax expense.
NET OPERATING INCOME
Three months ended Six months ended
June 30 June 30
(in thousands of dollars) 2010 2009 2010 2009
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Net operating income
- Canadian properties
Multi-unit residential $13,366 $12,025 $24,590 $22,672
Retail 7,853 6,642 14,426 13,632
Office and industrial 8,756 8,532 17,535 17,383
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29,975 27,199 56,551 53,687
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Net operating income - U.S.
properties in U.S. dollars
Multi-unit residential US 3,775 US 3,918 US 7,548 US 8,119
Retail US 4,893 US 5,060 US 9,487 US 10,250
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US 8,668 US 8,978 US 17,035 US 18,369
Exchange amount to
Canadian dollars 241 1,499 579 3,778
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Net operating income
- U.S. properties in
Canadian dollars 8,909 10,477 17,614 22,147
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Net operating income $38,884 $37,676 $74,165 $75,834
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Net operating income for the three months ended June 30, 2010, increased
to $38.9 million compared to $37.7 million in 2009, representing an increase
of 3.2%. Net operating income increased predominantly as a result of lower
utility expenses for the Canadian multi-unit residential properties and an
increase in revenue in the Canadian retail portfolio. The increase was
partially offset by the change in the U.S. dollar foreign exchange rate, which
decreased 17% as compared to 2009.
FUNDS FROM OPERATIONS ("FFO")
FFO was calculated as follows:
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Three months ended Six months ended
June 30 June 30
(in thousands of dollars) 2010 2009 2010 2009
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Net earnings from continuing
operations $17,299 $6,615 $21,701 $11,362
Items not affecting cash:
Amortization 14,966 16,420 30,733 33,691
Future income taxes 1,521 1,251 631 1,780
Non-controlling interest (42) - (75) -
Equity income from Morguard
REIT - continuing operations (2,739) (3,972) (5,747) (7,136)
Morguard REIT's equity
accounted FFO - continuing
operations operations 7,580 8,316 15,170 15,974
Gain on sale of property (9,971) (72) (9,971) (72)
Other 49 108 111 640
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Funds from operations $28,663 $28,666 $52,553 $56,239
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Per share amount - basic $2.13 $2.04 $3.83 $4.00
Per share amounts - diluted
diluted $2.13 $2.04 $3.83 $4.00
For the three months ended June 30, 2010, the Company recorded FFO of $28.7 million ($2.13 per diluted share) compared to $28.7 million ($2.04 per diluted share) in 2009. The net effect of the change in foreign exchange rates decreased FFO by $482 ($0.03 per share).
THIRD QUARTER DIVIDEND
The board of directors of Morguard Corporation announced today that the third quarterly, eligible dividend of 2010 in the amount of $0.15 per common share will be paid on September 30, 2010 to shareholders of record at the close of business on September 15, 2010.
Readers are cautioned that although the terms "Net Operating Income", and "Funds From Operations" are commonly used to measure, compare and explain the operating and financial performance of Canadian real estate companies and such terms are defined in the Management's Discussion and Analysis, such terms are not recognized terms under Canadian generally accepted accounting principles. Such terms do not necessarily have a standardized meaning and may not be comparable to similarly titled measures presented by the other publicly traded entities.
The Company's unaudited financial statements for the three months ended June 30, 2010, along with Management's Discussion and Analysis are available on the Company's website at www.morguard.com and have been filed with SEDAR at www.sedar.com.
Morguard Corporation is a real estate company, which owns a diversified portfolio of 100 retail, multi-unit residential, office and industrial properties comprising 10,297 multi-unit residential suites and approximately 6.4 million square feet of commercial leasable space. Morguard provides advisory and management services to institutional and other investors through Morguard Investments Limited and Morguard Residential. For more information, visit the Company's website at www.morguard.com.
For further information: Morguard Corporation, K. (Rai) Sahi, Chief Executive Officer, (905) 281-3800; Paul Miatello, Chief Financial Officer, (905) 281-3800