HALIFAX,
NS, Nov. 23, 2022 /CNW/ - (TSXV: NXLV)
– NexLiving Communities Inc. ("NexLiving" or the
"Company") announced operating and financial results for the three
and nine months ended September 30,
2022.
Stavro Stathonikos, President and
CEO commented: "We reported record operating and financial results
for the third quarter of 2022, with industry leading organic growth
of +4.8% for the quarter, and +7.7% year to date, more than
offsetting the impact of increased interest costs."
- Property revenue increased +55% to $3.1
million for the three month period and +57% to $8.6 million for the nine month period, driven by
strong property acquisitions and rental rate increases during the
period.
- Net operating income ("NOI") increased +50% to $1.8 million (58.2% margin) for the three month
period and +57% to $4.9 million
(56.8% margin) for the nine month period.
- Suite count increased to 867 from 549 (+58% Y/Y) at
September 30, 2021 as the Company
continued to execute on its acquisition pipeline.
- Same property NOI increased +4.8% and +7.7% for the three and
nine month periods, respectively. Same property margins improved by
+97 basis points and +114 basis points over the three month and
nine month periods, respectively, driven by rental rate increases
and cost controls.
- The portfolio remained highly occupied with 98% occupancy,
which reflects the attractive supply and demand fundamentals that
continue to persist in New
Brunswick. The increase in vacancy during the period
is largely attributable to the Company's deliberate suite
repositioning program in the Ontario market.
- FFO (cents per share) – diluted was 0.17 for the three month
period and grew +73% to 0.46 for the nine month period.
Q3 2022 Operating and Financial Highlights:
As at
|
September
30,
|
December
31,
|
Change
|
2022
|
2021
|
Number of investment
properties
|
28
|
25
|
3
|
Number of
suites
|
867
|
705
|
162
|
Occupancy
|
98 %
|
99 %
|
-128 bps
|
Debt to total
assets
|
62.0 %
|
57.7 %
|
4.3 %
|
Debt to GBV*
|
66.1 %
|
65.7 %
|
40 bps
|
Weighted average term
to debt maturity (years)
|
2.9
|
2.1
|
0.8
|
Weighted average
contractual interest rate
|
2.97 %
|
2.12 %
|
85 bps
|
Investment
properties
|
164,585,000
|
125,162,000
|
31.5 %
|
Total assets
|
177,644,145
|
143,758,717
|
23.6 %
|
Total
liabilities
|
110,065,242
|
82,956,832
|
32.7 %
|
Net asset
value
|
67,578,903
|
60,801,885
|
11.1 %
|
Net asset value per
share
|
0.23
|
0.22
|
1.6 %
|
|
|
|
|
For the three months
ended September 30
|
2022
|
2021
|
Change
|
Rental
income
|
3,088,988
|
1,997,351
|
54.7 %
|
NOI
|
1,796,660
|
1,196,750
|
50.1 %
|
NOI margin
|
58.2 %
|
59.9 %
|
-175 bps
|
Net
income
|
3,004,782
|
3,140,185
|
(4.3) %
|
FFO*
|
494,781
|
255,142
|
93.9 %
|
FFO (cents per share) -
diluted*
|
0.17
|
0.14
|
17.5 %
|
Dividends declared
(cents per share)
|
0.05
|
0.05
|
-
|
Weighted average units
outstanding - diluted
|
298,661,982
|
180,997,796
|
65.0 %
|
Same property
revenue*
|
1,819,569
|
1,766,346
|
3.0 %
|
Same property operating
expenses*
|
767,111
|
761,847
|
0.7 %
|
Same property
NOI*
|
1,052,458
|
1,004,499
|
4.8 %
|
Same property NOI
margin*
|
57.8 %
|
56.9 %
|
97 bps
|
|
|
|
|
For the nine months
ended September 30
|
2022
|
2021
|
Change
|
Rental
income
|
8,564,162
|
5,469,409
|
56.6 %
|
NOI
|
4,862,359
|
3,088,563
|
57.4 %
|
NOI margin
|
56.8 %
|
56.5 %
|
31 bps
|
Net
income
|
5,146,585
|
5,415,612
|
-5.0 %
|
FFO*
|
1,360,028
|
453,996
|
199.6 %
|
FFO (cents per share) -
diluted*
|
0.46
|
0.27
|
72.9 %
|
Dividends declared
(cents per share)
|
0.10
|
0.10
|
0.0 %
|
Weighted average units
outstanding - diluted
|
296,206,451
|
170,957,826
|
73.3 %
|
Same property
revenue*
|
5,417,223
|
5,134,845
|
5.5 %
|
Same property operating
expenses*
|
2,352,709
|
2,288,700
|
2.8 %
|
Same property
NOI*
|
3,064,514
|
2,846,145
|
7.7 %
|
Same property NOI
margin*
|
56.6 %
|
55.4 %
|
114 bps
|
*Refer to section "Non-IFRS Financial
Measures"
Acquisition Activity:
On August 9, 2022, the Company
acquired a 40-suite building in Strathroy, Ont. (294 Saulsbury St.), for
$9.4 million. The acquisition was
financed with a combination of cash on hand and a $7.9 million short-term debt facility, which
includes a capital expenditure facility. 294 Saulsbury is a
three-storey building situated on 1.44 acres of land in
Strathroy, a bedroom community 30
km west of London, Ontario. The
Company plans to undertake a targeted value-add capital program to
modernize and reposition the large 1- and 2-bedroom suites.
Fair Value of Investment Properties:
The Company's weighted average capitalization rate as at
September 30, 2022, decreased to
4.63% from 4.75% at December 31,
2021. The decrease was primarily due to the acquisition of
three properties during 2022, of which two were in Ontario and are valued at a capitalization
rate below the portfolio average. The gain in fair value recorded
by the Company reflects forecasted NOI growth due to expected rent
increases along with lower property taxes in New Brunswick.
Interest Rate Exposure:
On September 8, 2022 the Company
refinanced its maturing mortgage on the McLaughlin property and entered into a new
$14.9 million CMHC insured mortgage
for the property at a five year fixed interest rate of 3.83%. The
new mortgage replaced the previous $10.8
million mortgage with an interest rate of 1.56%.
Dividend:
The Company's board of directors has approved and declared a
dividend of 0.05 cents per common
share for the quarter ending December
31, representing 0.2 cents per
share on an annualized basis. The dividend is payable on, or after
December 30 to shareholders of record
at the close of business on December
2.
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 in Atlantic
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. For its recently acquired
properties in Ontario the Company
plans to undertake a targeted value-add capital program to
modernize and reposition the large 1- and 2-bedroom suites. 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 November 23, 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 November
23, 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.