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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Morguard Corp | TSX:MRC | Toronto | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.50 | -0.45% | 110.00 | 110.00 | 111.00 | 110.52 | 110.00 | 110.16 | 1,649 | 21:10:04 |
MISSISSAUGA, ON, Feb. 25, 2021 /CNW/ - Morguard Corporation ("Morguard" or the "Company") (TSX: MRC) today announced its financial results for the year ended December 31, 2020, including a brief operational and liquidity update as we continue to focus on managing through the COVID-19 pandemic.
Reporting Highlights
Operational and Balance Sheet Highlights
Financial Highlights
For the years ending December 31 | ||
(in thousands of dollars, except per common share) | 2020 | 2019 |
Revenue from real estate properties | $888,324 | $872,223 |
Revenue from hotel properties | 98,046 | 245,282 |
Management and advisory fees | 42,080 | 52,401 |
Interest and other income | 15,739 | 19,267 |
Total revenue | $1,044,189 | $1,189,173 |
Revenue from real estate properties | $888,324 | $872,223 |
Revenue from hotel properties | 98,046 | 245,282 |
Property operating expenses - excluding bad debt expense | (378,266) | (368,038) |
Property operating expenses - bad debt expense | (27,192) | (3,558) |
Hotel operating expenses | (89,669) | (189,728) |
Net operating income | $491,243 | $556,181 |
Net income (loss) attributable to common shareholders | ($98,918) | $186,939 |
Net income (loss) per common share – basic and diluted | ($8.83) | $16.57 |
Funds from operations | $161,200 | $250,871 |
FFO per common share – basic and diluted | $14.39 | $22.23 |
Normalized funds from operations | $181,205 | $225,612 |
Normalized FFO per common share – basic and diluted | $16.17 | $19.99 |
2020 Rental Collections
As at February 25, 2021, the Company's collection of rental revenues during 2020 is summarized below by asset class:
Asset Class | % Rental | ||||||
Q1 | Q2 | Q3 | October | November | December | Revenue | |
Residential | 99.8% | 99.6% | 99.4% | 99.0% | 98.6% | 98.2% | 44.3% |
Retail | 98.3% | 62.4% | 85.6% | 88.7% | 87.1% | 84.0% | 27.1% |
Office | 99.9% | 92.8% | 98.1% | 97.3% | 96.9% | 96.5% | 27.3% |
Industrial | 100.0% | 93.5% | 96.9% | 98.8% | 98.3% | 97.3% | 1.3% |
Total | 99.4% | 86.6% | 95.0% | 95.5% | 94.6% | 93.4% | 100.0% |
Liquidity
The Company has liquidity of approximately $564 million comprised of $142 million in cash and $422 million available under its revolving credit facilities. In addition, the Company has approximately $1,315 million of unencumbered income producing and hotel properties, and other investments which could be utilized for financing. To further enhance liquidity, the Company has narrowed down the scope of its capital expenditure program to ensure the availability of resources, allocating an amount that enables the Company to maintain the structural and overall safety of the properties. Management has also implemented various initiatives to reduce or defer operating expenses, property tax instalments, hydro payments and corporate income tax instalments. Management is also monitoring various government assistance programs in Canada and the U.S. structured to provide relief from personnel costs and commercial rent subsidies.
The Company has approximately $877.5 million of mortgages payable maturing during 2021 and 2022 having an aggregate loan-to-value ratio of 42% and a weighted-average interest rate of 3.9% which management expects to be able to refinance at similar or favourable terms. In addition, the Company has $200 million of senior unsecured debentures maturing in May 2021. The Company expects to be able to issue new debt instruments and use current liquidity sufficient to permit the repayment of its 2021 and 2022 maturities.
The duration and impact of the COVID-19 pandemic is unknown at this time. It is not possible to reliably estimate the length and severity of these developments and the impact on the financial performance and financial position of the Company in future periods.
Morguard's strategically diversified asset portfolio and healthy, conservative debt ratios and financial resources provide strength against economic and real estate cycles. Morguard has always been driven by our commitment to real estate for the long term. Our experience has proven that this persistence has driven greater value for our shareholders year over year, and our diversified portfolio and conservative debt level positions us well against any potential challenges. We will continue to carry on with this approach.
Net Operating Income
NOI decreased by $65.0 million, or 11.7%, during the year ended December 31, 2020, to $491.2 million, compared to $556.2 million generated in 2019, and is further analyzed by asset type below.
For the years ending December 31 | ||
(in thousands of dollars) | 2020 | 2019 |
Multi-suite residential | $227,565 | $212,039 |
Retail | 116,201 | 143,458 |
Office | 131,836 | 136,480 |
Industrial | 7,264 | 8,795 |
Hotels | 8,377 | 55,554 |
Adjusted NOI | 491,243 | 556,326 |
IFRIC 21 adjustment – multi-suite residential | - | (134) |
IFRIC 21 adjustment – retail | - | (11) |
NOI | $491,243 | $556,181 |
Adjusted NOI for the year ended December 31, 2020, decreased by $65.1 million, or 11.7% to $491.2 million, compared to $556.3 million in 2019, primarily due to the following:
Fair Value Gain (Loss) on Real Estate Properties
Fair value adjustments are determined based on the movement of various valuation parameters on a quarterly basis, including changes in projected cash flows as a result of leasing, capitalization rates, discount rates and terminal capitalization rates. During the year ended December 31, 2020, the Company recognized a net fair value loss on real estate properties of $511.5 million, compared to a net fair value gain of $27.1 million in 2019.
Fair value gain (loss) on real estate properties consists of the following:
For the years ending December 31 | ||
(in thousands of dollars, except per common share) | 2020 | 2019 |
Multi-suite residential | $86,287 | $72,823 |
Retail | (477,368) | (51,861) |
Office | (134,417) | (14,511) |
Industrial | 11,603 | 13,600 |
Properties under development | - | (61) |
Land held for development | 2,423 | 7,067 |
($511,472) | $27,057 |
For the year ended December 31, 2020, the Company recognized a net fair value gain of $86.3 million in the residential portfolio. The fair value gain is comprised of $196.3 million at the Canadian properties primarily as a result of a 25 basis point decrease in capitalization rates at properties located in the GTA as well as an increase in stabilized NOI, and a fair value loss of $110.0 million at the U.S. properties due to a decrease in stabilized NOI.
For the year ended December 31, 2020, the Company recognized a net fair value loss of $477.4 million in the retail portfolio. The fair value loss consists of $414.6 million at the Canadian properties predominantly due to a 25-50 basis point increase in capitalization rates and reductions in cash flow assumptions at most of the Company's enclosed malls due to COVID-19, and a fair value loss of $62.8 million at U.S. properties which was predominantly due to a 75 basis point increase in the capitalization rate at a property located in Louisiana and due to lower stabilized NOI.
For the year ended December 31, 2020, the Company recognized a net fair value loss of $134.4 million in the office portfolio. The fair value loss was mainly due to a 75 basis point increase in the capitalization rate and reductions in cash flow assumptions resulting from a lease amendment at a property located in Calgary, Alberta, and due to assumptions on the collectibility of rental revenue on cash flows due to COVID-19.
Funds From Operations
For the year ended December 31, 2020, the Company recorded FFO of $161.2 million ($14.39 per common share), compared to $250.9 million ($22.23 per common share) in 2019. The decrease in FFO of $89.7 million is mainly due to the following:
The change in foreign exchange rate had a positive impact on FFO of $0.6 million ($0.05 per common share).
The Company believes it is useful to provide an analysis of Normalized FFO which excludes non-recurring items on a net of tax basis and other fair value adjustments. Normalized FFO for the year ended December 31, 2020, was $181.2 million, or $16.17 per common share, versus $225.6 million, or $19.99 per common share, for the same period in 2019, which represents a decrease of $44.4 million, or 19.7%.
First Quarter Dividend
The Board of Directors of Morguard Corporation announced that the first quarterly, eligible dividend of 2021 in the amount of $0.15 per common share will be paid on March 31, 2021, to shareholders of record at the close of business on March 15, 2021.
The Company's audited financial statements for the year ended December 31, 2020, along with Management's Discussion and Analysis will be available on the Company's website at www.morguard.com and will be filed with SEDAR at www.sedar.com.
Non-IFRS Measures
The Company's consolidated financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS"). The following measures, NOI, Adjusted NOI, Comparative NOI, FFO and Normalized FFO (collectively, the "non-IFRS measures") as well as other measures discussed elsewhere in this press release, do not have a standardized meaning prescribed by IFRS and are, therefore, unlikely to be comparable to similar measures presented by other reporting issuers in similar or different industries. The Company uses these measures to better assess the Company's underlying performance and financial position and provides these additional measures so that investors may do the same. Details on non-IFRS measures are set out in the Company's Management's Discussion and Analysis for the year ended December 31, 2020 and available on the Company's profile on SEDAR at www.sedar.com.
About Morguard Corporation
Morguard Corporation is a real estate company, with total assets owned and under management valued at $19.0 billion. As at February 25, 2021, Morguard owns a diversified portfolio of 203 multi-suite residential, retail, office, industrial and hotel properties comprised of 17,752 residential suites, approximately 16.9 million square feet of commercial leasable space and 5,517 hotel rooms. Morguard also currently owns a 60.9% interest in Morguard Real Estate Investment Trust and a 44.7% effective interest in Morguard North American Residential Real Estate Investment Trust. Morguard also provides advisory and management services to institutional and other investors. For more information, visit the Company's website at www.morguard.com.
SOURCE Morguard Corporation
Copyright 2021 Canada NewsWire
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