HALIFAX,
NS, Aug. 29, 2022 /CNW/ - (TSXV:
NXLV) – NexLiving Communities Inc. ("NexLiving" or
the "Company") announced operating and financial results for the
three and six months ended June 30,
2022.
Stavro Stathonikos, President and
CEO commented: "We reported record operating and financial results
for the second quarter of 2022 along with introducing same property
metrics. The Company saw strong organic performance with same
property NOI growth of +23.0% for the quarter and +9.3% for the
first half of 2022. The results today continue to support our view
that New Brunswick remains one of
the best multi-family markets in Canada."
- Property revenue increased +70% to $2.9
million for the three month period and +58% to $5.5 million for the six month period, driven by
property acquisitions and rental rate increases during the
period.
- Net operating income ("NOI") increased +90% to $1.8 million (61.2% margin) for the three month
period and +62% to $3.1 million
(56.0% margin) for the six month period. NOI margins improved
throughout the year due to higher rental rates and cost controls.
NOI margin for the three month period includes the reversal of a
higher property tax provision related to a 10% cap on property
assessments in New Brunswick.
- Same property NOI increased +23.0% and +9.3% for the three and
six month periods, respectively, driven by rental rate increases
and cost controls. Results in the three month period benefitted
from the aforementioned property tax reversal.
- The portfolio remained highly occupied with 99% occupancy,
which reflects the attractive supply and demand fundamentals that
continue to persist in New
Brunswick.
- FFO (cents per share) – diluted was 0.19 for the three month
period and grew +140% to 0.28 for the six month period.
Q2 2022 Operating and Financial Highlights:
As at
|
June
30,
|
December
31,
|
Change
|
2022
|
2021
|
Number of investment
properties
|
27
|
25
|
2
|
Number of
suites
|
827
|
705
|
122
|
Occupancy
|
99 %
|
99 %
|
-32 bps
|
Debt to total
assets
|
61.1 %
|
57.7 %
|
3.4 %
|
Debt to GBV*
|
66.3 %
|
65.7 %
|
59 bps
|
Weighted average term
to debt maturity (years)
|
2.7
|
2.1
|
0.6
|
Weighted average
contractual interest rate
|
2.45 %
|
2.12 %
|
33 bps
|
Investment
properties
|
152,161,000
|
125,162,000
|
21.6 %
|
Total assets
|
166,332,168
|
143,758,717
|
15.7 %
|
Total
liabilities
|
101,678,966
|
82,956,832
|
22.6 %
|
Net asset
value
|
64,653,202
|
60,801,885
|
6.3 %
|
Net asset value per
share
|
0.22
|
0.22
|
0.6 %
|
|
|
|
|
|
|
|
|
For the three months
ended June 30
|
2022
|
2021
|
Change
|
Rental
income
|
2,921,829
|
1,719,991
|
69.9 %
|
NOI
|
1,787,610
|
939,540
|
90.3 %
|
NOI margin
|
61.2 %
|
54.6 %
|
656 bps
|
Net
income
|
962,621
|
1,847,318
|
(47.9) %
|
FFO*
|
594,532
|
-21,559
|
nmf
|
FFO (cents per share) -
diluted*
|
0.19
|
-0.01
|
nmf
|
Dividends declared
(cents per share)
|
0.05
|
0.05
|
-
|
Weighted average units
outstanding - diluted
|
308,348,730
|
173,338,359
|
77.9 %
|
Same property
revenue*
|
1,791,616
|
1,692,063
|
5.9 %
|
Same property operating
expenses*
|
655,113
|
768,194
|
(14.7) %
|
Same property
NOI*
|
1,136,503
|
923,869
|
23.0 %
|
Same property NOI
margin*
|
63.4 %
|
54.6 %
|
883 bps
|
|
|
|
|
|
|
|
|
For the six months
ended June 30
|
2022
|
2021
|
Change
|
Rental
income
|
5,475,174
|
3,472,058
|
57.7 %
|
NOI
|
3,065,699
|
1,891,813
|
62.1 %
|
NOI margin
|
56.0 %
|
54.5 %
|
151 bps
|
Net
income
|
2,141,603
|
2,275,428
|
-5.9 %
|
FFO*
|
865,047
|
198,855
|
335.0 %
|
FFO (cents per share) -
diluted*
|
0.28
|
0.12
|
140.1 %
|
Dividends declared
(cents per share)
|
0.10
|
0.10
|
0.0 %
|
Weighted average units
outstanding - diluted
|
305,787,502
|
168,803,667
|
81.1 %
|
Same property
revenue*
|
3,597,654
|
3,368,499
|
6.8 %
|
Same property operating
expenses*
|
1,585,598
|
1,526,854
|
3.8 %
|
Same property
NOI*
|
2,012,056
|
1,841,645
|
9.3 %
|
Same property NOI
margin*
|
55.9 %
|
54.7 %
|
125 bps
|
*Refer to section
"Non-IFRS Financial Measures"
|
Quarterly Highlights:
On April 5, 2022, the Company
completed the acquisition of a building in Riverview, NB ("Findlay Tower") with 64 suites
for $11.7 million, excluding closing
costs. In connection with the acquisition, NexLiving has assumed a
$9.25 million 40-year CMHC insured
mortgage with a 1.76% interest rate and a maturity date of
December 1, 2030.
On April 14, 2022, the Company
completed the acquisition of a building in Lindsay, ON ("35 Angeline") with 58 suites for
$13.4 million, excluding closing
costs. The Company intends to undergo a capital expenditure
program, which is expected to materially increase the NOI of the
building. The Company also secured a non-revolving acquisition loan
facility in the amount of $10,125,000
(bearing interest at 5.15%) and a capex loan facility in the amount
of $1,500,000 (bearing interest at
the bank's prime rate plus 1.5%).
On April 25, 2022, the Company
refinanced the mortgage for 75 Emma Street with a new CMHC insured
mortgage loan in the amount of $5,971,575 (bearing interest at 3.32%) for a 5
year term with a 40 year amortization period.
Subsequent Events:
On August 9, 2022, the Company
acquired a 40-suite building in Strathroy, Ont. (294 Saulsbury St.), for
$9.4 million. The acquisition
will be financed with a combination of cash on hand and a
$7.9 million short-term debt
facility, which will include a capital expenditure
facility. The Company plans to undertake a targeted value-add
capital program to modernize and reposition the large 1- and
2-bedroom suites.
Dividend:
The Company's board of directors has approved and declared a
dividend of 0.05 cents per common
share for the quarter ending September
30, representing 0.2 cents per
share on an annualized basis. The dividend is payable on, or after
September 30 to shareholders of
record at the close of business on September
3.
The Company designates these taxable dividends to be paid to its
holders as eligible dividends and will notify the holders such
dividends are being paid as eligible dividends for the purposes of
the Income Tax Act (Canada) and
corresponding provincial legislation.
About the Company
NexLiving continues to execute its plans to acquire recently
built or refurbished, highly leased multi-residential properties in
bedroom communities across Canada.
The Company aims to satisfy the needs of the newly emerging 55+
resident. The demographic that has changed the world is now
changing the way residential rental apartments cater to their
requirements. Their desire for community, along with service,
quality and convenience has led to the emergence of the 55+ active
living segment. Apartments are their next "home", after years of
owning they look forward to the carefree lifestyle provided through
renting in a community of their peers. NexLiving intends to
consolidate this emerging market niche. The Company currently owns
867 units in New Brunswick and
Ontario. NexLiving has also
developed a robust pipeline of qualified properties for potential
acquisition. By screening the properties identified to match the
criteria set out by the Company (proximity to healthcare,
amenities, services and recreation), management has assembled a
significant pipeline of potential acquisitions for consideration by
the Company's Board of Directors.
For more information about NexLiving, please refer to our
website at www.nexliving.ca and our public disclosure at
www.sedar.com.
Forward-Looking
Statements
This news release forward-looking information within the meaning
of applicable Canadian securities laws ("forward-looking
statements"). All statements other than statements of
historical fact are forward-looking statements. Often, but not
always, forward-looking statements can be identified by the use of
words such as "plans", "expects", "is expected", "budget",
"scheduled", "projects", "estimates", "forecasts", "intends",
"continues", "anticipates", or "does not anticipate" or "believes"
or variations (including negative variations) of such words and
phrases, or state that certain actions, events or results "may",
"could", "should", "would", "might" or "will" be taken, occur or be
achieved. Forward-looking statements contained in this news release
include, but are not limited to management's expectations of
additional rental increases to come into effect by year end and the
further enhancement of the Company's financial results. Such
forward-looking statements are qualified in their entirety by the
inherent risks and uncertainties surrounding future expectations.
These forward-looking statements reflect the current expectations
of the Company's management regarding future events and operating
performance, but involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or
achievements of the Company to be materially different from any
future results, performance or achievements expressed or implied by
such forward-looking statements. Actual events could differ
materially from those projected herein and depend on a number of
factors. These risks and uncertainties are more fully described in
regulatory filings, including the Company's Annual Information
Form, which can be obtained on SEDAR at www.sedar.com, under
NexLiving's profile, as well as under Risk Factors section of the
MD&A released on April 18,
2022. Although forward-looking statements contained in this
new release are based upon what management believes are reasonable
assumptions, there can be no assurance that actual results will be
consistent with these forward-looking statements. Accordingly,
readers should not place undue reliance on forward-looking
statements. The forward-looking statements in this new release
speak only as of the date of this news release. Except as required
by applicable securities laws, the Company does not undertake, and
specifically disclaims, any obligation to update or revise any
forward-looking statements, whether as a result of new information,
future developments or otherwise, except as required by applicable
law.
Non-IFRS Financial
Measures
The Company prepares and releases unaudited consolidated interim
financial statements and audited consolidated annual financial
statements prepared in accordance with IFRS. In this and other
earnings releases, as a complement to results provided in
accordance with IFRS, NexLiving discloses financial measures not
recognized under IFRS which do not have standard meanings
prescribed by IFRS. These include FFO, FFO (cents per share) –
diluted, Debt to GBV and Same Property metrics (collectively, the
"Non-IFRS Measures"). These Non-IFRS Measures are further
defined and discussed in the MD&A released on August 26, 2022, which should be read in
conjunction with this news release. Since these measures are not
recognized under IFRS, they may not be comparable to similar
measures reported by other issuers. The Company presents the
Non-IFRS measures because management believes these Non-IFRS
measures are relevant measures of the ability of NexLiving to earn
revenue and to evaluate its performance and cash flows. A
reconciliation of these Non-IFRS measures is included in the
MD&A released on August
26, 2022. The Non-IFRS measures should not be
construed as alternatives to net income (loss) or cash flows from
operating activities determined in accordance with IFRS as
indicators of the Company's performance.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this press release.
SOURCE NexLiving Communities Inc.