Morguard Corporation Announces 2009 Second Quarter Results and Regular Dividend
Aug 6, 2009
MISSISSAUGA, ON, Aug. 6 /CNW/ - Morguard Corporation (TSX: MRC) announced
its financial results for the three months ended June 30, 2009.Q2 2009 HIGHLIGHTS
- Total revenues for the three months ended June 30, 2009, increased to
$86.0 million from $82.9 million for the same period in 2008;
- Net operating income in Q2 2009 increased to $37.7 million compared
to $37.0 million in 2008;
- Net income from continuing operations for the three months ended June
30, 2009, totaled $6.7 million compared to net income of $6.2 million
in 2008;
- Funds from operations for the three months ended June 30, 2009,
increased to $28.7 million or $2.04 per share compared to $27.0
million or $1.92 per share in 2008;
- The Company has refinanced, or has commitments to refinance,
virtually all of the mortgages maturing during 2009 at a weighted
average interest rate of 4.57%.
FINANCIAL HIGHLIGHTS
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Three months ended Six months ended
June 30 June 30
(in thousands of dollars) 2009 2008 2009 2008
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Income from real estate
properties $70,118 $65,758 $142,178 $130,859
Management and advisory
fee revenue 14,630 15,583 29,355 29,856
Sales of product and land 1,293 1,605 2,539 3,115
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Total revenues $86,041 $82,946 $174,072 $163,830
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Income from real
estate properties $70,118 $65,758 $142,178 $130,859
Property operating expense (32,442) (28,717) (66,344) (58,899)
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Net operating income $37,676 $37,041 $75,834 $71,960
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Funds from operations $28,666 $27,041 $56,239 $52,535
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Net income from continuing
operations $6,723 $6,204 $11,552 $35,353
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Net income for the period $6,723 $8,625 $11,552 $37,649
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Income per share
Basic - continuing
operations $0.48 $0.44 $0.82 $2.54
Diluted - continuing operations $0.48 $0.44 $0.82 $2.51
Basic - net income $0.48 $0.62 $0.82 $2.70
Diluted - net income $0.48 $0.62 $0.82 $2.68
NET INCOME
Net income for the three months ended June 30, 2009, was $6.7 million
($0.48 per share) compared to $8.7 million ($0.62 per share) in 2008. The
decrease in net income of $2.0 million was primarily due to a year over year
$2.5 million decrease in equity income from Morguard REIT's discontinued
operations.
NET OPERATING INCOME ("NOI")
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Three months ended Six months ended
June 30 June 30
(in thousands of dollars) 2009 2008 2009 2008
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Multi-unit residential - Canada $12,025 $12,887 $22,672 $23,872
Multi-unit residential - U.S. 4,572 3,667 9,789 7,166
Retail - Canada 6,642 6,171 13,632 12,414
Retail - U.S. 5,905 5,541 12,358 10,754
Office/Industrial 8,532 8,775 17,383 17,754
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Net operating income $37,676 $37,041 $75,834 $71,960
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Net operating income for the three months ended June 30, 2009, increased
to $37.7 million compared to $37.0 million in 2008 representing an increase of
1.9%. The increase was mainly due to the change in the U.S. dollar foreign
exchange rate which increased reported NOI by approximately $1.4 million. Net
operating income also increased as a result of higher occupancy levels in the
Canadian retail portfolio compared to 2008, offset by reductions in NOI from
the Canadian multi-unit residential and office & industrial portfolios.
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) 2009 2008 2009 2008
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Net earnings from
continuing operations $6,723 $6,204 $11,552 $35,353
Items not affecting cash:
Amortization 16,420 14,907 33,691 30,395
Future income taxes 1,295 1,141 1,857 12,922
Non-controlling interest - (33) - (260)
Equity income from Morguard
REIT - continuing operations (4,124) (2,752) (7,403) (22,115)
Morguard REIT's equity
accounted FFO - continuing
operations 8,424 7,574 16,164 15,681
Gain on pension valuation
allowance - - - (19,441)
Gain on sale of property (72) - (72) -
Other - - 450 -
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Funds from operations $28,666 $27,041 $56,239 $52,535
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Per share amount - basic $2.04 $1.94 $4.00 $3.77
Per share amounts - diluted $2.04 $1.92 $4.00 $3.75For the three months ended June 30, 2009, the Company recorded FFO of
$28.7 million ($2.04 per diluted share) compared to $27.0 million ($1.92 per
diluted share) in 2008. The increase of $1.6 million, or 6.0%, in FFO was
primarily the result of increased NOI and an increase in Morguard REIT's
equity accounted FFO.
FINANCING AND LIQUIDITY
As announced in the Company's press release dated July 30, 2009,
virtually all of the mortgages maturing during 2009 have been successfully
refinanced or commitments to refinance have been obtained. As of today's date
one Canadian retail asset and two Canadian multi-unit residential assets had
been funded. A commitment to refinance a third Canadian multi-unit residential
asset has been received and is expected to be funded during the third quarter
of 2009. Gross proceeds from the four previously mentioned refinancings will
total $123 million which will be used to repay maturing mortgages of $57
million, repay bank indebtedness and for general corporate purposes. The
weighted average interest rate of the maturing mortgages was 6.33% while new
mortgages have been refinanced at a weighted average interest rate of 4.86%
for a five-year term. Upon funding the remaining multi-unit residential
mortgage, the Company expects to have cash and borrowing capacity under
existing credit facilities of approximately $165 million.
THIRD QUARTER DIVIDEND
The board of directors of Morguard Corporation announced today that the
third quarterly dividend of 2009 in the amount of $0.15 per common share will
be paid on September 30, 2009 to shareholders of record at the close of
business on September 15, 2009.
The Company's unaudited financial statements for the three months ended
June 30, 2009 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
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.
Morguard Corporation is a real estate company, which owns a diversified
portfolio of 103 properties in Canada and the United States. Morguard's
portfolio has a book value of approximately $1.7 billion and comprises 6.7
million square feet of commercial space and 10,504 apartment suites. For more
information, visit the Company's website at www.morguard.com.
For further information:
For further information: Morguard Corporation, K. (Rai) Sahi, Chief Executive Officer, (905) 281-3800; Paul Miatello, Chief Financial Officer, (905) 281-3800