HALIFAX, NS, Aug. 15, 2024 /CNW/ - (TSXV: NXLV) - NexLiving Communities Inc. ("NexLiving" or the "Company") announced operating and financial results for the three-month and six-month periods ended June 30, 2024.
NexLiving Communities Inc. Logo (CNW Group/NexLiving Communities Inc.)
Stavro Stathonikos, President & CEO commented: "Strong market fundamentals have contributed to sustained top line growth across our portfolio this year. I am particularly pleased with our team's ability to reduce operating expenses year-over-year, despite facing materially higher property taxes. Our FFO per share increased by +21.3% in the first half of the year, reflecting the progress in driving operational improvements. As we look ahead, our focus remains on completing the transformational Devcore transaction, which we anticipate to close in the third quarter."
Summary of Results:
Property revenue increased +3.4% to $4.9 million for the three-month period and +9.7% to $9.8 million for the six-month period ended June 30, 2024.
Net operating income ("NOI") increased +5.0% to $3.0 million (61.2% margin) for the three-month period and +13.3% to $5.9 million (59.8% margin) for the six-month ended June 30, 2024.
FFO per share increased +8.8% for the three-month period and +21.3% for the six-month period ended June 30, 2024, on a fully diluted basis.
Same property NOI for the three-month period increased +5.5% as revenue grew by +3.6% and same property expenses increased by 0.7%. The increase in same property operating expenses was primarily due to higher property taxes in New Brunswick, partially offset by lower maintenance and insurance costs.
Same property NOI for the six-month period increased +8.1% as revenue grew by +4.7% and same property expenses were stable.
Q2 2024 Operating and Financial Highlights:
As at
30-juin-24
31-déc-23
Change
Number of suites
1 039
1 166
(127)
Occupancy
95,0 %
96,8 %
(180) bps
Net Debt to GBV*
66,3 %
68,6 %
(227) bps
Weighted average term to debt maturity (years)
5,3
4,6
0,7 yrs
Weighted average contractual interest rate
3,81 %
3,71 %
10 bps
Net asset value
76 840 666
74 633 442
3,0 %
Net asset value per share
$ 4,61
$ 4,49
2,6 %
For the three months ended June 30,
2024
2023
Change
NOI
2 980 777
2 838 998
5,0 %
NOI margin
61,2 %
60,3 %
91 bps
FFO*
645 649
592 596
9,0 %
FFO per share - diluted*
0,039
0,04
8,8 %
FFO payout ratio*
26 %
28 %
(229) bps
Same property revenue*
3 740 791
3 612 049
3,6 %
Same property operating expenses*
1 464 081
1 453 436
0,7 %
Same property NOI*
2 276 710
2 158 613
5,5 %
Same property NOI margin*
60,9 %
59,8 %
110 bps
For the six months ended June 30,
2024
2023
Change
NOI
5 852 964
5 168 162
13,3 %
NOI margin
59,8 %
58,0 %
188 bps
FFO*
1 449 831
1 148 209
26,3 %
FFO per share - diluted*
0,09
0,07
21,3 %
FFO payout ratio*
23 %
28 %
(494) bps
Same property revenue*
7 512 881
7 177 173
4,7 %
Same property operating expenses*
3 003 402
3 006 438
(0,1) %
Same property NOI*
4 509 479
4 170 735
8,1 %
Same property NOI margin*
60,0 %
58,1 %
191 bps
*Refer to section "Non-IFRS Financial Measures"
Fair Value of Investment Properties:
The Company's weighted average capitalization rate as at June 30, 2024, decreased 3 basis points from December 31, 2023, due to the sale of one of the Company's investment properties during 2024. The gain in fair value recorded by the Company in the three-month and six-month periods ended June 30, 2024, of $193,373 and $392,291 respectively, was due to forecasted NOI growth from expected rent increases and operating expense efficiencies.
Occupancy:
As of June 30, 2024, the portfolio had an occupancy rate of 95.0%, reflecting a 140 basis point decrease over the quarter and 180 basis point decrease in the first half of 2024.
In Moncton, occupancy was unchanged at 97.7% in the first half of 2024.
In Ontario, occupancy increased by 600 basis points to 94.1% in the first half of 2024 as the Company successfully leased vacant units following the completion of repositioning work.
In Saint John, occupancy declined by 790 basis points to 90.2% in the first half of 2024, primarily due to increased tenant turnover driven by the completion of new rental developments over the summer in the local market. This impact was particularly notable in the Company's recently developed properties in the municipality. The Company had not implemented any tenant incentives during the quarter, however, subsequent to quarter end the Company matched the competitive offerings of the new developments and occupancy in the Saint John portfolio recovered by 350 basis points to 93.7%.
Transaction Update:
On June 27, 2024, the Company extended the expiry of the purchase agreement for the Devcore transaction announced on January 21, 2024, to July 31, 2024, with the option to further extend the expiry under certain conditions. The Company and Devcore continue to make progress towards closing the Transaction and expect that the Transaction will close during the third quarter.
Dividend:
The Company's board of directors has approved and declared a dividend of $0.01 per common share for the quarter ending June 30, 2024, representing $0.04 per share on an annualized basis. The dividend is payable on, or after September 27, 2024, to shareholders of record at the close of business on September 6, 2024.
About the Company
The Company continues to execute on its plan to acquire recently built or refurbished, highly leased multi-residential properties in bedroom communities across Canada. The Company aims to deliver exceptional living experiences to our residents and provide comfortable, affordable housing solutions that cater to a wide range of demographics. The properties offer a range of modern and updated suites, with a variety of amenities and features that allow residents to experience a hassle-free and maintenance-free lifestyle. The Company is committed to investing in its properties to ensure that they are modern and up-to-date. For its recently acquired properties in Ontario, the Company has undertaken a targeted value-add capital program to modernize and reposition the large existing suites. The Company currently owns 1,039 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.sedarplus.ca.
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, which can be obtained on SEDAR at www.sedarplus.ca, under NexLiving's profile, as well as under Risk Factors section of the MD&A released on August 15, 2024. 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, FFO payout ratio, 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 dated April 23, 2024, 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 dated August 15, 2024. 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.
