09 Aug With Cash on Hand Ready to be Deployed for Acquisitions, BTB Posts Strong 2021 Second Quarter Results
Montréal (Québec) August 9th, 2021: BTB Real Estate Investment Trust (TSX: BTB.UN) (“BTB” or the “REIT”) releases today its financial results for the second quarter ended June 30th, 2021, compared to the second quarter of 2020 and present the following highlights and information:
HIGHLIGHTS OF THE SECOND QUARTER ENDED JUNE 30TH, 2021
- Improved Results and Continued Stability: during the quarter, BTB showed improved financial results and stability through its retail, office, and industrial operating segments. As a reminder, the results of the second quarter of last year were impacted by the financial effect of the Canada Emergency Commercial Rent Assistance (“CECRA”) program. This program, in addition to rent concessions granted to tenants, impacted 2020’s NOI by $0.5 million. NOI was also impacted by $1.1 million as a result of a higher provision for credit losses and by a reduction of the fair value of properties of $10.5 million. During the first and second quarter of 2021, BTB did not have to record any major impact caused by COVID-19. Revenues have improved and BTB’s results for Q2 2021, demonstrate the improvement in its financial performance.
- Cash Position: BTB concluded Q2 2021 with a cash position of $25.3 million. The $19.0 million increase in cash since the last quarter is mainly due to the net proceeds received from the equity issue of $31.6 million (excluding transaction costs). The operating and acquisition lines of credit were fully repaid and thus our cash on hand and on our lines of credit of $23 million are fully available and ready to be deployed. Beyond BTB’s cash position of $25.3 million, the Trusts’ financial capacity is beyond $40 million, which would allow BTB to acquire approximately $100 million in assets without going to market.
- NOI Margin: stands at 59.8 % compared to 53.8 % for the same period last year. The Trust recorded additional recoveries of $1.4 million and not considering these recoveries, the NOI margin would be 57.5%, still representing a 3.7% increase compared to the same period last year.
- SPNOI Margin: stands at 59.7% for the quarter compared to 54.2% for the same period last year. Excluding non-recurring items, SPNOI increased by 3.3% compared to Q2 2020.
- Lease Renewals and New Leases Concluded: leasing activities were strong as BTB renewed and leased vacant spaces totaling 175,193 sq. ft. Lease renewal activities showed an 86.2% renewal rate, a 10.2% increase as compared to the prior quarter. Leases representing a total of 97,193 sq. ft. were renewed, and leases representing 78,000 sq. ft. were signed with new tenants. This leasing activity resulted in a 1.2% increase in the occupancy rate to 92.2%, compared to the last quarter.
- Funds From Operations (FFO) & Adjusted Funds From Operations (AFFO): For Q2 2021, BTB is reporting a recurring FFO of 12.5 ¢ per unit compared to 7.5 ¢ per unit for the same period in 2020 and a recurring AFFO of 11.8¢ per unit for Q2 2021 compared to 6.7¢ per unit compared to the same period in 2020: The recurring FFO payout ratio is 59.9% for the quarter compared to 113.9% in Q2 2020. The recurring AFFO payout ratio is 63.7 % for the quarter compared to 126.6 % in Q2 2020.
- Debt Ratio: As of June 30th, 2021, BTB’s total debt ratio stood at 56.0%, a reduction of 2.6% compared to the same quarter of 2020. The debt metrics continue to demonstrate BTB’s intent to maintain its total debt ratio below 60%. This reduction is primarily due to the recent equity issue, the conversion of Series H debentures by certain holders throughout the past quarters, combined with the full repayment of the outstanding amount on the acquisition line of credit.
- Industrial Building Acquisition: On June 29th, 2021, BTB acquired an industrial property located at 6000 Kieran Street, in the Saint-Laurent borough of Montréal, for a total consideration of $15.25 million, (excluding transaction costs). With a total leasable area of 99,000 sq. ft., this property is entirely leased to Kore Outdoor Inc, a global leader in the manufacturing of high-quality paintball products.
- Bought-Deal: on April 28th, 2021, BTB closed a bought-deal public offering. BTB sold an aggregate of 7,809,650 units at a price of $4.05 per unit for aggregate gross proceeds of $31.6 million (excluding transaction costs).
- Short Form Base Shelf Prospectus: On June 15th, 2021, BTB filed and obtained a receipt for a final short form base shelf prospectus, providing BTB with efficient access to Canadian capital markets for an aggregate offering amount up to $200 million.
A MESSAGE FROM MICHEL LÉONARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER
“We are proud to report strong results for the second consecutive quarter. Over the past months, we have been focused on solidifying our business foundations and we are emerging from the pandemic with more solid foundations.
The past quarter’s activities have demonstrated our determination towards BTB’s strategic growth, allowing us to purchase accretive assets. We are focused on securing investment opportunities, which will contribute to reach or surpass the important threshold of $1B of assets. With our cash on hand and the available lines of credit, BTB can acquire properties without raising funds in the public markets.
For the quarter, our recurring FFO payout ratio stood at 59.9%, while our AFFO payout ratio is 63.7% recording yet another significant improvement in these ratios, for a fourth consecutive quarter. Our total debt ratio again declined, standing at 56.0% at the end of Q2 2021. As we return to more normal business conditions, we are standing on solid ground to launch a new phase of growth for the Trust.”
SUMMARY OF OTHER SIGNIFICANT HIGHLIGHTS AS OF JUNE 30TH, 2021
- Total number of properties: 65
- Total leasable area: approximately 5.4 million sq.ft.
- Total asset value: $965 million
- Market capitalization: $299 million
The following two tables summarize our results for the quarters ended June 30th, 2021, and 2020.
Quarterly Results Information
NON-IFRS FINANCIAL MEASURES
Net operating income, net operating income of the same-property portfolio, funds from operations and adjusted funds from operations are not measures recognized by International Financial Reporting Standards (“IFRS”) and do not have standardized meanings prescribed by IFRS. Such measures may differ from similar computations as reported by similar entities and, accordingly, may not be comparable to similar measures.
QUARTERLY CALL INFORMATION
Management will hold a conference call on Tuesday, August 10th, 2021, at 10 am, Eastern Standard Time, to present BTB’s financial results and performance for the second quarter of 2021.
Date: Tuesday, August 10th, 2021
Time: 10 am, EST
Dial: Toronto and over-seas: 1-416-764-8688 & North America (toll free): 1-888-390-0546
Visual: A presentation will be uploaded on BTB’s website prior to the call https://www.btbreit.com/investor-relations-2/annual-meeting-presentations/
Conference call operators will coordinate the question-and-answer period (from analysts only) and will instruct participants regarding the procedures during the call.The media and all interested parties may attend the call-in listening mode only.
The audio recording of the conference call will be available by via playback until
August 17th, 2021, by dialing: 1-416-764-8677 (local) or, 1-888-390-0541 (toll-free) and by entering the following access code: 059469#.
This press release may contain forward-looking statements with respect to BTB. These statements generally can be identified by use of forward-looking words such as “may”, “will”, “expect”, “estimate”, “anticipate”, “intends”, “believe” or “continue” or the negative thereof or similar variations. The actual results and performance of BTB could differ materially from those expressed or implied by such statements.
Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Some important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, changes in government regulation and the factors described from time to time in the documents filed by BTB with the securities regulators in Canada. The cautionary statements qualify all forward-looking statements attributable to BTB and persons acting on their behalf. Unless otherwise stated or required by applicable law, all forward-looking statements speak only as of the date of this press release.
BTB is a real estate investment trust listed on the Toronto Stock Exchange. BTB is an important owner of properties in eastern Canada. As of August 9th, 2021, BTB owns 65 retail, office, and industrial properties for a total leasable area of approximately 5.4 million sq.ft. and an approximate total asset value as of June 30th, 2021, of approximately of $965 million.
- Generate stable monthly cash distributions that are reliable and fiscally beneficial to
- Grow the REIT’s assets through internal growth and accretive acquisitions to increase distributable income and therefore fund
- Optimize the value of its assets through the dynamic management of its properties to maximize the long-term value of its properties and therefore, its units.
BTB offers a distribution reinvestment plan to unitholders whereby the participants may elect to have their monthly cash distribution reinvested in additional units of BTB at a price based on the weighted average price for BTB’s units on the Toronto Stock Exchange for the five trading days immediately preceding the distribution date, discounted by 3%.
For more detailed information, visit BTB’s website at www.btbreit.com.
FOR FURTHER QUESTIONS:
Mr. Michel Léonard, President and Chief Executive Officer
(T) 514-286-0188 x228
Mr. Mathieu Bolté, Vice-President & Chief Financial Officer
(T) 514-286-0188 x244