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Name | Symbol | Market | Type |
---|---|---|---|
RioCan Real Estate Investment Trust | TSX:REI.UN | Toronto | Trust |
Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.20 | 1.15% | 17.57 | 17.55 | 17.60 | 17.62 | 17.37 | 17.42 | 581,149 | 21:12:39 |
August 1, 2023--RioCan Real Estate Investment Trust (“RioCan" or the "Trust”) (TSX: REI.UN) announced today its financial results for the three and six months ended June 30, 2023 (the "Second Quarter").
“RioCan reported another quarter of operational excellence. Our quality portfolio maintained high occupancy and drove strong leasing spreads while our development completions continued to deliver new and diversified income,” said Jonathan Gitlin, President and CEO of RioCan. “The consistent strength of our operating results are evidence that our business is set up to succeed in any environment. The RioCan team remains focused on delivering growing and sustainable value for the long-term while we pro-actively manage risk and improve our balance sheet."
Financial Highlights
Three months ended June 30
Six months ended June 30
(in millions, except where otherwise noted, and per unit values)
2023
2022
2023
2022
FFO 1
$
131.6
$
131.7
$
263.0
$
262.2
FFO per unit - diluted 1
$
0.44
$
0.43
$
0.88
$
0.85
Net income
$
112.0
$
78.5
$
230.0
$
238.5
Weighted average Units outstanding - diluted (in thousands)
300,500
308,537
300,524
309,324
As at
June 30, 2023
December 31, 2022
Net book value per unit
$
26.00
$
25.73
1.
A non-GAAP measurement. For definitions, reconciliations and the basis of presentation of RioCan's non-GAAP measures, refer to the Basis of Presentation and Non-GAAP Measures section in this News Release.
FFO per Unit and Net Income
1.
A non-GAAP measurement. For definitions, reconciliations and the basis of presentation of RioCan's non-GAAP measures, refer to the Basis of Presentation and Non-GAAP Measures section in this News Release.
Operation Highlights
Three months ended June 30
Six months ended June 30
2023
2022
2023
2022
Operation Highlights (i)
Occupancy - committed (ii)
97.4
%
97.2
%
97.4
%
97.2
%
Retail occupancy - committed (ii)
98.0
%
97.6
%
98.0
%
97.6
%
Blended leasing spread
9.0
%
10.5
%
10.3
%
9.8
%
New leasing spread
11.3
%
6.8
%
12.5
%
11.1
%
Renewal leasing spread
8.2
%
11.2
%
9.6
%
9.3
%
(i)
Includes commercial portfolio only.
(ii)
Information presented as at respective periods then ended.
RioCan Living Update 1
1.
Units at 100% ownership interest.
Development Highlights
Three months ended June 30
Six months ended June 30
(in millions except square feet)
2023
2022
2023
2022
Development Highlights
Development Completions - sq. ft. in thousands (i)
110.0
69.0
176.0
214.0
Development Spending
$
103.0
$
139.6
$
191.3
$
231.5
Development Projects Under Construction - sq. ft. in thousands (ii)
1,850.0
2,320.0
1,850.0
2,320.0
(i)
At RioCan's ownership. Represents net leasable area (NLA) of property under development completions. Excludes NLA of residential inventory completions.
(ii)
Information presented as at the respective periods then ended, includes properties under development and residential inventory, equity-accounted joint ventures and represents gross floor area of the respective projects.
Investing and Capital Recycling
1.
A non-GAAP measurement. For definitions, reconciliations and the basis of presentation of RioCan's non-GAAP measures, refer to the Basis of Presentation and Non-GAAP Measures section in this News Release.
Capital Management Update
1.
A non-GAAP measurement. For definitions, reconciliations and the basis of presentation of RioCan's non-GAAP measures, refer to the Basis of Presentation and Non-GAAP Measures section in this News Release.
Balance Sheet Strength
(in millions except percentages)
As at
June 30, 2023
December 31, 2022
Balance Sheet Strength Highlights
Liquidity (i) 1
$
1,666
$
1,548
Adjusted Debt to Adjusted EBITDA (i) 1
9.49x
9.51x
Total Adjusted Debt to Total Adjusted Assets (i) 1
45.6%
45.2%
Unencumbered Assets (i) 1
$
8,631
$
8,257
Unencumbered Assets to Unsecured Debt (i) 1
207%
218%
(i)
At RioCan's proportionate share.
1.
A non-GAAP measurement. For definitions, reconciliations and the basis of presentation of RioCan's non-GAAP measures, refer to the Basis of Presentation and Non-GAAP Measures section in this News Release.
Conference Call and Webcast
Interested parties are invited to participate in a conference call with management on Wednesday, August 2, 2023 at 10:00 a.m. (ET). Participants will be required to identify themselves and the organization on whose behalf they are participating.
To access the conference call, click on the following link to register at least 10 minutes prior to the scheduled start of the call: Pre-registration link. Participants who pre-register at any time prior to the call will receive an email with dial-in credentials including a login passcode and PIN to gain immediate access to the live call. Those that are unable to pre-register may dial-in for operator assistance by calling 1-833-950-0062 and entering the access code: 836769.
For those unable to participate in the live mode, a replay will be available at 1-866-813-9403 with access code: 976025.
To access the simultaneous webcast, visit RioCan’s website at Events and Presentations and click on the link for the webcast.
About RioCan
RioCan is one of Canada’s largest real estate investment trusts. RioCan owns, manages and develops retail-focused, increasingly mixed-use properties located in prime, high-density transit-oriented areas where Canadians want to shop, live and work. As at June 30, 2023, our portfolio is comprised of 193 properties with an aggregate net leasable area of approximately 33.5 million square feet (at RioCan's interest) including office, residential rental and 11 development properties. To learn more about us, please visit www.riocan.com.
Basis of Presentation and Non-GAAP Measures
All figures included in this News Release are expressed in Canadian dollars unless otherwise noted. RioCan’s unaudited interim condensed consolidated financial statements ("Condensed Consolidated Financial Statements") are prepared in accordance with International Financial Reporting Standards (IFRS). Financial information included within this News Release does not contain all disclosures required by IFRS, and accordingly should be read in conjunction with the Trust's Condensed Consolidated Financial Statements and MD&A for the three and six months ended June 30, 2023, which are available on RioCan's website at www.riocan.com and on SEDAR at www.sedar.com.
Consistent with RioCan’s management framework, management uses certain financial measures to assess RioCan’s financial performance, which are not in accordance with generally accepted accounting principles (GAAP) under IFRS. Funds From Operations (“FFO”), FFO per unit, Net Operating Income ("NOI"), Same Property NOI, Development Spending, Total Acquisitions, Ratio of floating rate debt to total debt, Liquidity, Adjusted Debt to Adjusted EBITDA, Total Adjusted Debt to Total Adjusted Assets, RioCan's Proportionate Share, Unencumbered Assets to Unsecured Debt and Percentage of Normalized NOI Generated from Unencumbered Assets, as well as other measures that may be discussed elsewhere in this News Release, do not have a standardized definition prescribed by IFRS and are, therefore, unlikely to be comparable to similar measures presented by other reporting issuers. RioCan supplements its IFRS measures with these Non-GAAP measures to aid in assessing the Trust’s underlying performance and reports these additional measures so that investors may do the same. Non-GAAP measures should not be considered as alternatives to net income or comparable metrics determined in accordance with IFRS as indicators of RioCan’s performance, liquidity, cash flow, and profitability. For full definitions of these measures, please refer to the "Non-GAAP Measures” section in RioCan’s MD&A for the three and six months ended June 30, 2023.
The reconciliations for non-GAAP measures included in this News Release are outlined as follows:
RioCan's Proportionate Share
The following table reconciles the consolidated balance sheets from IFRS to RioCan's proportionate share basis as at June 30, 2023 and December 31, 2022:
As at
June 30, 2023
December 31, 2022
(in thousands of dollars)
IFRS basis
Equity-
accounted investments
RioCan's proportionate share
IFRS basis
Equity-
accounted investments
RioCan's proportionate share
Assets
Investment properties
$
13,875,163
$
413,564
$
14,288,727
$
13,807,740
$
398,701
$
14,206,441
Equity-accounted investments
383,958
(383,958
)
—
364,892
(364,892
)
—
Mortgages and loans receivable
223,299
—
223,299
269,339
—
269,339
Residential inventory
327,596
238,732
566,328
272,005
214,536
486,541
Assets held for sale
155,000
—
155,000
42,140
—
42,140
Receivables and other assets
304,488
43,619
348,107
259,514
37,779
297,293
Cash and cash equivalents
253,944
13,324
267,268
86,229
8,001
94,230
Total assets
$
15,523,448
$
325,281
$
15,848,729
$
15,101,859
$
294,125
$
15,395,984
Liabilities
Debentures payable
$
3,241,201
$
—
$
3,241,201
$
2,942,051
$
—
$
2,942,051
Mortgages payable
2,643,007
182,941
2,825,948
2,659,180
172,100
2,831,280
Lines of credit and other bank loans
1,202,628
102,723
1,305,351
1,141,112
89,187
1,230,299
Accounts payable and other liabilities
626,624
38,814
665,438
630,624
32,838
663,462
Total liabilities
$
7,713,460
$
324,478
$
8,037,938
$
7,372,967
$
294,125
$
7,667,092
Equity
Unitholders’ equity
7,809,988
803
7,810,791
7,728,892
—
7,728,892
Total liabilities and equity
$
15,523,448
$
325,281
$
15,848,729
$
15,101,859
$
294,125
$
15,395,984
The following tables reconcile the consolidated statements of income from IFRS to RioCan's proportionate share basis for the three and six months ended June 30, 2023 and 2022:
Three months ended June 30, 2023
Three months ended June 30, 2022
(in thousands of dollars)
IFRS basis
Equity-
accounted investments
RioCan's proportionate share
IFRS basis
Equity-
accounted investments
RioCan's proportionate share
Revenue
Rental revenue
$
270,913
$
9,982
$
280,895
$
267,302
$
7,363
$
274,665
Residential inventory sales
—
517
517
35,005
—
35,005
Property management and other service fees
5,139
—
5,139
6,112
—
6,112
276,052
10,499
286,551
308,419
7,363
315,782
Operating costs
Rental operating costs
Recoverable under tenant leases
93,622
905
94,527
92,129
661
92,790
Non-recoverable costs
3,594
451
4,045
5,521
575
6,096
Residential inventory cost of sales
—
261
261
29,857
—
29,857
97,216
1,617
98,833
127,507
1,236
128,743
Operating income
178,836
8,882
187,718
180,912
6,127
187,039
Other income (loss)
Interest income
5,701
665
6,366
4,885
574
5,459
Income from equity-accounted investments
5,830
(5,830
)
—
1,165
(1,165
)
—
Fair value loss on investment properties, net
(10,594
)
(1,072
)
(11,666
)
(42,270
)
(3,476
)
(45,746
)
Investment and other income (loss)
1,657
123
1,780
(1,379
)
(149
)
(1,528
)
2,594
(6,114
)
(3,520
)
(37,599
)
(4,216
)
(41,815
)
Other expenses
Interest costs, net
49,974
2,724
52,698
43,659
1,807
45,466
General and administrative
14,846
20
14,866
16,400
16
16,416
Internal leasing costs
3,018
—
3,018
2,825
—
2,825
Transaction and other costs
1,594
24
1,618
1,517
88
1,605
69,432
2,768
72,200
64,401
1,911
66,312
Income before income taxes
$
111,998
$
—
$
111,998
$
78,912
$
—
$
78,912
Current income tax expense
31
—
31
452
—
452
Net income
$
111,967
$
—
$
111,967
$
78,460
$
—
$
78,460
Six months ended June 30, 2023
Six months ended June 30, 2022
(in thousands)
IFRS basis
Equity-
accounted investments
RioCan's proportionate share
IFRS basis
Equity-
accounted investments
RioCan's proportionate share
Revenue
Rental revenue
$
545,594
$
17,432
$
563,026
$
539,433
$
14,301
$
553,734
Residential inventory sales
—
2,880
2,880
50,974
936
51,910
Property management and other service fees
9,958
—
9,958
11,993
—
11,993
555,552
20,312
575,864
602,400
15,237
617,637
Operating costs
Rental operating costs
Recoverable under tenant leases
192,430
1,786
194,216
192,251
1,284
193,535
Non-recoverable costs
11,043
1,145
12,188
11,577
1,163
12,740
Residential inventory cost of sales
—
1,387
1,387
43,793
422
44,215
203,473
4,318
207,791
247,621
2,869
250,490
Operating income
352,079
15,994
368,073
354,779
12,368
367,147
Other income (loss)
Interest income
12,742
1,268
14,010
8,946
1,144
10,090
Income from equity-accounted investments
11,344
(11,344
)
—
5,255
(5,255
)
—
Fair value loss on investment properties, net
(27,959
)
(451
)
(28,410
)
(6,838
)
(4,266
)
(11,104
)
Investment and other income (loss)
4,544
(213
)
4,331
(1,563
)
(207
)
(1,770
)
671
(10,740
)
(10,069
)
5,800
(8,584
)
(2,784
)
Other expenses
Interest costs, net
97,957
5,218
103,175
85,425
3,648
89,073
General and administrative
30,464
31
30,495
27,863
31
27,894
Internal leasing costs
5,743
—
5,743
5,810
—
5,810
Transaction and other costs
1,982
5
1,987
2,692
105
2,797
136,146
5,254
141,400
121,790
3,784
125,574
Income before income taxes
$
216,604
$
—
$
216,604
$
238,789
$
—
$
238,789
Current income tax (recovery) expense
(13,367
)
—
(13,367
)
271
—
271
Net income
$
229,971
$
—
$
229,971
$
238,518
$
—
$
238,518
NOI and Same Property NOI
The following table reconciles operating income to NOI and Same Property NOI to NOI for the three and six months ended June 30, 2023 and 2022:
Three months ended June 30
Six months ended June 30
(thousands of dollars)
2023
2022
2023
2022
Operating Income
$
178,836
$
180,912
$
352,079
$
354,779
Adjusted for the following:
Property management and other service fees
(5,139
)
(6,112
)
(9,958
)
(11,993
)
Residential inventory gains
—
(5,148
)
—
(7,181
)
Operational lease revenue from ROU assets
1,571
1,386
3,428
2,731
NOI
$
175,268
$
171,038
$
345,549
$
338,336
Three months ended June 30
Six months ended June 30
(thousands of dollars)
2023
2022
2023
2022
Same Property NOI
$
157,215
$
149,430
$
308,260
$
295,385
NOI from income producing properties:
Acquired (i)
170
80
366
226
Disposed (i)
597
8,228
1,562
18,373
767
8,308
1,928
18,599
NOI from completed properties under development
8,020
4,055
14,027
8,244
NOI from properties under de-leasing under development
2,931
2,813
5,600
5,531
Lease cancellation fees
179
2,671
4,741
3,554
Straight-line rent adjustment
1,027
359
1,600
1,274
NOI from residential rental
5,129
3,402
9,393
5,749
NOI
$
175,268
$
171,038
$
345,549
$
338,336
(i)
Includes properties acquired or disposed of during the periods being compared.
FFO
The following table reconciles net income attributable to Unitholders to FFO for the three and six months ended June 30, 2023 and 2022:
Three months ended June 30
Six months ended June 30
(thousands of dollars, except where otherwise noted)
2023
2022
2023
2022
Net income attributable to Unitholders
$
111,967
$
78,460
$
229,971
$
238,518
Add back/(Deduct):
Fair value losses, net
10,594
42,270
27,959
6,838
Fair value losses included in equity-accounted investments
1,072
3,476
451
4,266
Internal leasing costs
3,018
2,825
5,743
5,810
Transaction losses on investment properties, net (i)
176
353
112
736
Transaction costs on sale of investment properties
344
713
511
1,314
ERP implementation costs
2,454
—
6,408
—
Change in unrealized fair value on marketable securities
(173
)
1,401
813
1,401
Current income tax expense (recovery)
31
452
(13,367
)
271
Operational lease revenue from ROU assets
1,196
985
2,550
1,930
Operational lease expenses from ROU assets in equity-accounted investments
(13
)
(11
)
(25
)
(23
)
Capitalized interest on equity-accounted investments (ii)
966
733
1,843
1,169
FFO
$
131,632
$
131,657
$
262,969
$
262,230
Add back:
Restructuring costs
11
3,170
624
3,780
FFO Adjusted
$
131,643
$
134,827
$
263,593
$
266,010
FFO per unit - basic
$
0.44
$
0.43
$
0.88
$
0.85
FFO per unit - diluted
$
0.44
$
0.43
$
0.88
$
0.85
FFO Adjusted per unit - diluted
$
0.44
$
0.44
$
0.88
$
0.86
Weighted average number of Units - basic (in thousands)
300,386
308,312
300,374
309,070
Weighted average number of Units - diluted (in thousands)
300,500
308,537
300,524
309,324
FFO for last 4 quarters
$
525,415
$
535,661
Distributions paid for last 4 quarters
$
313,887
$
306,986
FFO Payout Ratio
59.7
%
57.3
%
(i)
Represents net transaction gains or losses connected to certain investment properties during the period.
(ii)
This amount represents the interest capitalized to RioCan's equity-accounted investment in WhiteCastle New Urban Fund 2, LP, WhiteCastle New Urban Fund 3, LP, WhiteCastle New Urban Fund 4, LP, WhiteCastle New Urban Fund 5, LP, RioCan-Fieldgate JV, RC (Queensway) LP, RC (Leaside) LP- Class B and PR Bloor Street LP. This amount is not capitalized to properties under development under IFRS, but is allowed as an adjustment under REALPAC’s definition of FFO.
Development Spending
Total Development Spending for the three and six months ended June 30, 2023 and 2022 is as follows:
Three months ended June 30
Six months ended June 30
(thousands of dollars)
2023
2022
2023
2022
Development expenditures on balance sheet:
Properties under development
$
67,610
$
96,106
$
134,522
$
157,271
Residential inventory
31,640
35,363
49,191
63,708
RioCan's share of Development Spending from equity-accounted joint ventures
3,749
8,136
7,634
10,510
Total Development Spending
$
102,999
$
139,605
$
191,347
$
231,489
Total Acquisitions
Total Acquisitions for the three and six months ended June 30, 2023 and 2022 are as follows:
Three months ended June 30
Six months ended June 30
(thousands of dollars)
2023
2022
2023
2022
Income producing properties
$
70,271
$
—
$
70,271
$
89,948
Properties under development
5,736
—
34,583
11,946
Residential inventory
—
—
—
19,440
RioCan's share of acquisitions from equity-accounted joint ventures
—
—
—
66,497
Total Acquisitions
$
76,007
$
—
$
104,854
$
187,831
Total Adjusted Debt and Total Contractual Debt
The following tables reconcile total debt to Total Adjusted Debt, total assets to Total Adjusted Assets, and total debt to Total Contractual Debt as at June 30, 2023 and December 31, 2022:
As at
June 30, 2023
December 31, 2022
(thousands of dollars, except where otherwise noted)
IFRS basis
Equity-accounted investments
RioCan's
proportionate share
IFRS basis
Equity-accounted investments
RioCan's
proportionate share
Debentures payable
$
3,241,201
$
—
$
3,241,201
$
2,942,051
$
—
$
2,942,051
Mortgages payable
2,643,007
182,941
2,825,948
2,659,180
172,100
2,831,280
Lines of credit and other bank loans
1,202,628
102,723
1,305,351
1,141,112
89,187
1,230,299
Total debt
$
7,086,836
$
285,664
$
7,372,500
$
6,742,343
$
261,287
$
7,003,630
Cash and cash equivalents
253,944
13,324
267,268
86,229
8,001
94,230
Total Adjusted Debt
$
6,832,892
$
272,340
$
7,105,232
$
6,656,114
$
253,286
$
6,909,400
Total assets
$
15,523,448
$
325,281
$
15,848,729
$
15,101,859
$
294,125
$
15,395,984
Cash and cash equivalents
253,944
13,324
267,268
86,229
8,001
94,230
Total Adjusted Assets
$
15,269,504
$
311,957
$
15,581,461
$
15,015,630
$
286,124
$
15,301,754
Total Adjusted Debt to Total Adjusted Assets
44.7
%
45.6
%
44.3
%
45.2
%
As at
June 30, 2023
December 31, 2022
(thousands of dollars)
IFRS basis
Equity-
accounted investments
RioCan's proportionate share
IFRS basis
Equity-
accounted investments
RioCan's
proportionate share
Total debt
$
7,086,836
$
285,664
$
7,372,500
$
6,742,343
$
261,287
$
7,003,630
Less:
Unamortized debt financing costs, premiums and discounts on origination and debt assumed, and modifications
(23,343
)
(601
)
(23,944
)
(15,634
)
(690
)
(16,324
)
Total Contractual Debt
7,110,179
286,265
7,396,444
6,757,977
261,977
7,019,954
Floating Rate Debt and Fixed Rate Debt
As at
June 30, 2023
December 31, 2022
(thousands of dollars, except where otherwise noted)
IFRS basis
Equity-
accounted investments
RioCan's proportionate share
IFRS basis
Equity-
accounted investments
RioCan's proportionate share
Total fixed rate debt
$
6,683,145
$
200,612
$
6,883,757
$
6,301,054
$
141,720
$
6,442,774
Total floating rate debt
403,691
85,052
488,743
441,289
119,567
560,856
Total debt
$
7,086,836
$
285,664
$
7,372,500
$
6,742,343
$
261,287
$
7,003,630
Ratio of floating rate debt to total debt
5.7
%
6.6
%
6.5
%
8.0
%
Total floating rate debt
$
403,691
$
85,052
$
488,743
$
441,289
$
119,567
$
560,856
Less:
Revolving unsecured operating line of credit
224,770
—
224,770
131,601
—
131,601
Total floating rate debt
(excluding revolving unsecured operating line of credit)
$
178,921
$
85,052
$
263,973
$
309,688
$
119,567
$
429,255
Ratio of floating rate debt to total debt (excluding revolving unsecured operating line of credit)
2.5
%
3.6
%
4.6
%
6.1
%
Liquidity
As at June 30, 2023, RioCan had approximately $1.7 billion of Liquidity as summarized in the following table:
As at
June 30, 2023
December 31, 2022
(thousands of dollars)
IFRS basis
Equity-
accounted investments
RioCan's
proportionate share
IFRS basis
Equity-
accounted investments
RioCan's
proportionate share
Undrawn revolving unsecured operating line of credit
$
1,023,000
$
—
$
1,023,000
$
1,116,351
$
—
$
1,116,351
Undrawn construction lines and other bank loans
283,110
92,273
375,383
267,562
70,094
337,656
Cash and cash equivalents
253,944
13,324
267,268
86,229
8,001
94,230
Liquidity
$
1,560,054
$
105,597
$
1,665,651
$
1,470,142
$
78,095
$
1,548,237
Adjusted EBITDA
The following table reconciles consolidated net income attributable to Unitholders to Adjusted EBITDA:
Twelve months ended
June 30, 2023
December 31, 2022
(thousands of dollars)
IFRS basis
Equity-
accounted investments
RioCan's proportionate share
IFRS basis
Equity-
accounted investments
RioCan's proportionate share
Net income attributable to Unitholders
$
228,225
$
—
$
228,225
$
236,772
$
—
$
236,772
Add (deduct) the following items:
Income tax expense (recovery):
Current
(12,717
)
—
(12,717
)
921
—
921
Fair value losses on investment properties, net
262,249
12,393
274,642
241,128
16,208
257,336
Change in unrealized fair value on marketable securities (i)
3,195
—
3,195
3,783
—
3,783
Internal leasing costs
12,137
—
12,137
12,204
—
12,204
Non-cash unit-based compensation expense
9,766
—
9,766
9,056
—
9,056
Interest costs, net
192,897
9,812
202,709
180,365
8,242
188,607
Restructuring costs
1,134
—
1,134
4,289
—
4,289
ERP implementation costs
6,408
—
6,408
—
—
—
Depreciation and amortization
4,201
—
4,201
4,774
—
4,774
Transaction losses on the sale of investment properties, net (ii)
400
—
400
1,024
—
1,024
Transaction costs on investment properties
4,935
—
4,935
5,734
3
5,737
Operational lease revenue (expenses) from ROU assets
4,706
(48
)
4,658
4,086
(46
)
4,040
Adjusted EBITDA
$
717,536
$
22,157
$
739,693
$
704,136
$
24,407
$
728,543
(i)
The fair value gains and losses on marketable securities may include both the change in unrealized fair value and realized gains and losses on the sale of marketable securities. By adding back the change in unrealized fair value on marketable securities, RioCan effectively continues to include realized gains and losses on the sale of marketable securities in Adjusted EBITDA and excludes unrealized fair value gains and losses on marketable securities in Adjusted EBITDA.
(ii)
Includes transaction gains and losses realized on the disposition of investment properties.
Adjusted Debt to Adjusted EBITDA Ratio
Adjusted Debt to Adjusted EBITDA is calculated as follows:
Twelve months ended
June 30, 2023
December 31, 2022
(thousands of dollars, except where otherwise noted)
IFRS basis
Equity-
accounted investments
RioCan's
proportionate share
IFRS basis
Equity-
accounted investments
RioCan's
proportionate share
Adjusted Debt to Adjusted EBITDA
Average total debt outstanding
$
6,872,987
$
268,708
$
7,141,695
$
6,756,628
$
251,888
$
7,008,516
Less: average cash and cash equivalents
(112,497
)
(10,092
)
(122,589
)
(74,871
)
(8,791
)
(83,662
)
Average Total Adjusted Debt
$
6,760,490
$
258,616
$
7,019,106
$
6,681,757
$
243,097
$
6,924,854
Adjusted EBITDA (i)
$
717,536
$
22,157
$
739,693
$
704,136
$
24,407
$
728,543
Adjusted Debt to Adjusted EBITDA
9.42
9.49
9.49
9.51
(i)
Adjusted EBITDA is reconciled in the immediately preceding table above.
Unencumbered Assets
The tables below summarize RioCan's Unencumbered Assets to Unsecured Debt and Percentage of Normalized NOI Generated from Unencumbered Assets as at June 30, 2023 and December 31, 2022:
As at
June 30, 2023
December 31, 2022
(thousands of dollars, except where otherwise noted)
Targeted
Ratios
IFRS basis
Equity-
accounted investments
RioCan's proportionate share
IFRS basis
Equity-
accounted investments
RioCan's proportionate share
Unencumbered Assets
$
8,570,191
$
60,966
$
8,631,157
$
8,200,280
$
56,228
$
8,256,508
Total Unsecured Debt
$
4,177,000
$
—
$
4,177,000
$
3,783,649
$
—
$
3,783,649
Unencumbered Assets to Unsecured Debt
> 200%
205
%
207
%
217
%
218
%
Subsequent to quarter end:
Change in Unencumbered Assets
—
—
—
Repayment of Unsecured Debt on July 4, 2023
(210,000
)
—
(210,000
)
Proforma Unencumbered Assets
$
8,570,191
$
60,966
$
8,631,157
Proforma Unsecured Debt
$
3,967,000
$
—
$
3,967,000
Proforma Unencumbered Assets to Unsecured Debt
216
%
218
%
Annual Normalized NOI - total portfolio (i)
$
688,892
$
33,648
$
722,540
$
646,540
$
23,488
$
670,028
Annual Normalized NOI - Unencumbered Assets (i)
$
415,972
$
3,644
$
419,616
$
370,804
$
3,440
$
374,244
Percentage of Normalized NOI Generated from Unencumbered Assets
> 50.0%
60.4
%
58.1
%
57.4
%
55.9
%
(i) Annual Normalized NOI are reconciled in the table below.
Three months ended June 30, 2023
Three months ended December 31, 2022
(thousands of dollars)
IFRS basis
Equity-
accounted investments
RioCan's proportionate share
IFRS basis
Equity-
accounted investments
RioCan's proportionate share
NOI (i)
$
175,268
$
8,412
$
183,680
$
166,062
$
5,872
$
171,934
Adjust the following:
Miscellaneous revenue
(1,134
)
—
(1,134
)
(802
)
—
(802
)
Percentage rent
(1,732
)
—
(1,732
)
(3,234
)
—
(3,234
)
Lease cancellation fees
(179
)
—
(179
)
(391
)
—
(391
)
Normalized NOI - total portfolio
$
172,223
$
8,412
$
180,635
$
161,635
$
5,872
$
167,507
Annual Normalized NOI - total portfolio(ii)
$
688,892
$
33,648
$
722,540
$
646,540
$
23,488
$
670,028
NOI from unencumbered assets
$
105,983
$
911
$
106,894
$
94,957
$
860
$
95,817
Adjust the following for Unencumbered Assets:
Miscellaneous revenue
(629
)
—
(629
)
(518
)
—
(518
)
Percentage rent
(1,198
)
—
(1,198
)
(1,430
)
—
(1,430
)
Lease cancellation fees
(163
)
—
(163
)
(308
)
—
(308
)
Normalized NOI - Unencumbered Assets
$
103,993
$
911
$
104,904
$
92,701
$
860
$
93,561
Annual Normalized NOI - Unencumbered Assets (ii)
$
415,972
$
3,644
$
419,616
$
370,804
$
3,440
$
374,244
(i) Refer to the NOI and Same Property NOI table of this section for reconciliation from NOI to operating income.
(ii) Calculated by multiplying Normalized NOI by a factor of 4.
Forward-Looking Information
This News Release contains forward-looking information within the meaning of applicable Canadian securities laws. This information reflects RioCan’s objectives, our strategies to achieve those objectives, as well as statements with respect to management’s beliefs, estimates and intentions concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking information can generally be identified by the use of forward-looking terminology such as “outlook”, “objective”, “may”, “will”, “would”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “should”, “plan”, “continue”, or similar expressions suggesting future outcomes or events. Such forward-looking information reflects management’s current beliefs and is based on information currently available to management. All forward-looking information in this News Release is qualified by these cautionary statements. Forward-looking information is not a guarantee of future events or performance and, by its nature, is based on RioCan’s current estimates and assumptions, which are subject to numerous risks and uncertainties, including those described in the “Risks and Uncertainties” section in RioCan's MD&A for the three and six months ended June 30, 2023 and in our most recent Annual Information Form, which could cause actual events or results to differ materially from the forward-looking information contained in this News Release. Although the forward-looking information contained in this News Release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with this forward-looking information.
The forward-looking statements contained in this News Release are made as of the date hereof, and should not be relied upon as representing RioCan’s views as of any date subsequent to the date of this News Release. Management undertakes no obligation, except as required by applicable law, to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise.
View source version on businesswire.com: https://www.businesswire.com/news/home/20230801515143/en/
RioCan Real Estate Investment Trust Dennis Blasutti Chief Financial Officer 416-866-3033 | www.riocan.com
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