RioCan announces 2Q2016 financial results

TORONTO, ONTARIO, 2016-Aug-04 — /EPR Retail News/ — RioCan Real Estate Investment Trust (“RioCan”) (TSX:REI.UN)

RioCan’s HIGHLIGHTS for the three and six months ended June 30, 2016 were:

  • During the quarter, RioCan completed the sale of its U.S. operations. With the proceeds from the sale, RioCan has reduced its Total Debt to Total Assets ratio (net of cash, on a proportionate basis) to a historically low 38.0% as at June 30, 2016, from 46.3% as at December 31, 2015;
  • On June 1, 2016 RioCan entered into a new $1 billion unsecured operating credit facility (“Operating
    Facility”), which replaced RioCan’s secured operating credit facilities;
  • The new Operating Facility, together with the debt repayments from the sale of the U.S. portfolio enabled RioCan to grow its unencumbered asset pool as at June 30, 2016 to $5.4 billion, or 256% of the Trust’s unsecured debt;
  • As expected due to the sale of RioCan’s U.S. operations during the quarter, Operating Funds From Operations (“Operating FFO”) for the Second Quarter was lower by $1 million, or 0.9% at $135 million as compared to $136 million for the same period in 2015. On a per unit basis Operating FFO was $0.42 per unit as compared to $0.43 per unit for the second quarter in 2015, representing decline of 2.9%. However, RioCan’s Canadian or continuing operations produced solid results;
  • On a continuing operations basis, Operating FFO increased $8.8 million, or 8.1% to $118 million in the
    Second Quarter as compared to $109 million the second quarter of 2015;
  • Same Store Net Operating Income (“NOI”) turned positive in the three months ended June 30, 2016 (“Second Quarter”). Canadian same store NOI increased 0.8%, or $1.1 million in the Second Quarter compared to the same period in 2015;
  • RioCan’s concentration of annualized net rental revenue in Canada’s six major markets as at June 30,
    2016 increased to 75.7% from 74.4% as at June 30, 2015;
  • RioCan’s AFFO payout ratio for the twelve months ended June 30, 2016 improved to 89.9% as compared to 94.5 % for the twelve months ended June 30, 2015;
  • Committed occupancy improved 200 basis points in Canada, to 95.1% at June 30, 2016 from its lowest point in the prior year of 93.1% at June 30, 2015;
  • After the quarter end, RioCan acquired CPPIB’s interest in four properties at an aggregate purchase price of $352 million, and since September 30, 2015 RioCan has acquired, net of dispositions, an interest in more than $1.1 billion of income producing properties in Canada; and
  • In RioCan’s development portfolio RioCan REIT, Allied Properties REIT and Diamond corp (collectively, “The Well JV”) entered into a binding agreement to sell the residential component of The Well to Tridel Builders Inc. and Woodbourne Canada Partners III (CA) LP. This agreement will reduce the financial exposure to the project, and is expected to enable the partners to develop The Well in a single phased development.

RioCan Real Estate Investment Trust (“RioCan”) today (July 29, 2016) announced its financial results for the three and six months ended June 30, 2016.

“During the past quarter we achieved three very significant milestones in the history of the Trust. Through the sale and repatriation of our capital from our very successful venture into the U.S., we reduced our leverage to its lowest level in our history,” said Edward Sonshine, Chief Executive Officer of RioCan. “I am quite satisfied with our growth in Operating FFO in our Canadian operations and expect it to grow over the next two years. Our recently announced acquisitions, completions in our ongoing development programme, and lease up of current vacancies lead me to be confident about RioCan’s Canadian growth in the near term. Over the long term, our urban development and intensification strategy will be the key contributor to our future Operating FFO growth. Our ability to achieve all of this without materially increasing our leverage from its current historical low level is a direct result of our strategic move into and out of the United States, and the significant new capital creation resulting from that profitable strategy.”

Financial Highlights

All figures are expressed in Canadian dollars unless otherwise noted. For further information about RioCan’s results for the three and six months ended June 30, 2016, this earnings release should be read in conjunction with our unaudited interim condensed consolidated financial statements (“Consolidated Financial Statements”), as well as, management’s discussion and analysis for the three and six months ended June 30, 2016 together with our 2015 Annual Report.

RioCan’s Consolidated Financial Statements are prepared in accordance with International Financial Reporting Standards (“IFRS”). Consistent with RioCan’s management framework, management uses certain financial measures to assess RioCan’s financial performance, which are not generally accepted accounting principles (GAAP) under IFRS. For full definitions of these measures, please refer to the “Use of Non-GAAP Measures” in RioCan’s June 30, 2016 Management’s Discussion and Analysis. As a result of the recently completed sale of its U.S. operations, we have reported our former U.S. geographic segment performance as “discontinued operations” with comparative income statement amounts adjusted to reflect this change, unless otherwise noted.


Contact Information:
RioCan Real Estate Investment Trust
Cynthia J. Devine
Executive Vice President, Chief Financial Officer
and Corporate Secretary
(647) 253-4973

Source: RioCan