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RioCan Announces Fourth Quarter and Year End Results for 2020


RioCan Announces Fou

iCrowdNewswire   Feb 12, 2021  12:08 PM ET

 RioCan Real Estate Investment Trust (“RioCan” or the “Trust”) announced today its financial results for the three months (“Fourth Quarter”) and year ended December 31, 2020.

“I cap off my 108th and last quarter as CEO of RioCan as we continue to grapple with the COVID-19 pandemic. Considering the unparalleled impact of the pandemic on our business, including rent collection, tenant restructuring, and a less active transaction market, RioCan came through very well, ending the year with record liquidity and achieving our FFO per Unit guidance,” said Edward Sonshine, CEO of RioCan. “We made the difficult, yet prudent and correct decision to reduce our distribution to optimize capital allocation towards value creation opportunities such as development, debt repayment and unit buybacks. Our development program is poised to deliver new and diversified sources of income and cash flow from development completions with more to come given our large and robust pipeline. All of these actions will allow us to raise our distribution when the economy recovers as the pandemic dissipates. While we continue to face the second wave of the pandemic and an uneven road to economic recovery, RioCan’s best-in-class team under the leadership of Jonathan Gitlin, my successor, are well-positioned to unlock the embedded value in our great portfolio. In my new role as the Board Chairman, I look forward to watching RioCan enter its next phase of growth as life returns to a normal state, hopefully by the end of 2021.” 

           
    Three months ended
December 31
    Year ended
December 31
(in millions except percentages, square feet and per unit values)       2020        2019         2020        2019
                       
Financial Highlights                      
Net income (loss)   $ 65.6     $ 150.8     $ (64.8)       $ 775.8
Weighted average Units outstanding – diluted (in thousands)   317,739     315,080     317,725       307,779
FFO (i)   $ 124.1     $ 146.1     $ 507.4       $ 575.8
FFO per unit – diluted (i)   $ 0.39     $ 0.46     $ 1.60       $ 1.87
                       
                       
Operation Highlights                      
Same property NOI (decline) growth – overall portfolio (i)       (7.9)%       2.3%         (6.5)%         2.1%
Six major markets – % of total annualized revenue (ii)       90.0 %       90.1%         90.0 %         90.1%
Greater Toronto Area – % of total annualized revenue (ii)       51.3 %       52.4%         51.3 %         52.4%
Occupancy – committed six major markets (ii)       96.1 %       97.7%         96.1 %         97.7%
Occupancy – committed (ii)       95.7 %       97.2%         95.7 %         97.2%
Blended leasing spread       3.8 %       8.2%         5.0 %         9.4%
New leasing spread       5.1 %       2.1%         7.9 %         10.0%
Renewal leasing spread       3.6 %       10.2%         4.4 %         9.2%
                       
                       
Development Highlights                      
Development completions – sq ft in thousands   320.0     118.0     529.0       530.0
Development expenditures (iii)   $ 141.4     $ 143.5     $ 493.4       $ 473.7
Properties under development and residential inventory as a percentage of consolidated gross book value of assets (maximum permitted: 15%) (ii) (iii)       10.3 %       9.0%         10.3 %         9.0%
                       
                       
Balance Sheet Strength Highlights                      
Debt to Adjusted EBITDA (i) (iv)   9.47x     8.06x           9.47x           8.06x
Ratio of total debt to total assets (i) (ii) (iv)       45.0 %       42.1%         45.0 %         42.1%
Unencumbered assets (i) (ii) (iv)   $ 8,727     $ 8,937     $ 8,727       $ 8,937
Unencumbered assets to unsecured debt (i) (ii) (iv)       215 %       227%         215 %         227%
                       

 

(i) A Non-GAAP measurement. For definitions and the basis of presentation of RioCan’s Non-GAAP measures, refer to the Non-GAAP Measures section in RioCan’s Management’s Discussion and Analysis (MD&A) for the year ended December 31, 2020.
(ii) Information presented as at December 31 for the years then ended.
(iii) Includes costs incurred for various properties under development and for residential inventory in respective reporting periods.
(iv) At RioCan’s proportionate share.
   

COVID-19 Pandemic and Its Impacts on RioCan Property Operations

         
  Q4 2020 Q3 2020 Q2 2020 Total 2020 (i)
Total cash collected (ii) 94.2 % 94.5 % 87.2 % 91.8 %
Deferred rents with definitive payment schedule 0.8 % 0.2 % 4.7 % 2.0 %
Provision for rent abatements and bad debts 3.4 % 5.3 % 6.8 % 5.2 %
Remaining rent to be collected 1.6 % % 1.3 % 1.0 %
Total 100.0 % 100.0 % 100.0 % 100.0 %

 

(i) Based on total of Q2 2020 to Q4 2020 for respective items out of total of billed gross rents for the three quarters.
(ii) Includes $2.9 million of security deposits applied in Q3 2020, representing approximately 1.1% of billed gross rents for that quarter. Total cash collected includes CECRA funding received.
   
     
Tenant Composition % of Annualized Net Rent Q4 2020 Cash Rent
Collection % (iv)
Strong (i) 61.1 % 99.4 %
Stable (ii) 17.7 % 93.8 %
Subtotal 78.8 % 98.1 %
Potentially Vulnerable (iii) 21.2 % 81.4 %
Total 100.0 % 94.2 %

 

(i) Strong is represented by, or includes, national office tenants and essential / necessity / value / and specialty retail tenants that have strong rent paying ability in the current pandemic impacted environment and also includes residential tenants.
(ii) Stable is represented by, or includes, tenants with reasonably strong uses and good rent paying ability or tenants with medium uses in the current environment but strong rent paying ability.
(iii) Potentially Vulnerable, particularly under COVID-19 includes tenants with uses that are significantly impacted by the pandemic (such as movie theatres, gyms, sit-down restaurants) as well as uses that were of concern prior to the pandemic (such as apparel) or tenants whom the Trust has concerns over tenant rent paying ability under the COVID-19 circumstances.
(iv) Includes tenant direct cash collection as of February 10, 2021 relating to Q4 2020 billed gross rents. The CECRA program ended in September 2020 and therefore, there was no CECRA government funding during the Fourth Quarter.
   

FFO and Net Income

Same Property NOI – Commercial

Operations – Commercial

Operations – Residential

Capital Recycling

Development Highlights

Ample Liquidity and Balance Sheet Strength

Environmental, Social and Governance (ESG) Priorities and Progress

Conference Call and Webcast

Interested parties are invited to participate in a conference call with management on Thursday, February 11, 2021 at 9:00 a.m. (ET). Participants will be required to identify themselves and the organization on whose behalf they are participating.

In order to participate, please dial 647-427-3230 or 1-877-486-4304. For those unable to participate in the live mode, a replay will be available at 1-855-859-2056, passcode 6966094#.

For a copy of the slides to be used for the conference call or, to access the simultaneous webcast, visit RioCan’s website at http://investor.riocan.com/investor-relations/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 December 31, 2020, our portfolio is comprised of 223 properties with an aggregate net leasable area of approximately 38.3 million square feet (at RioCan’s interest) including office, residential rental and 14 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 consolidated financial statements (“2020 Annual 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 2020 Annual Consolidated Financial Statements and MD&A for the year ended December 31, 2020, which is 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”), Same Property NOI, Debt to Adjusted EBITDA, Ratio of Total Debt to Total Assets, RioCan’s Proportionate Share, Unencumbered Assets to Unsecured Debt and Total Enterprise Value, 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 earnings 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 year ended December 31, 2020.

 

Contact Information
RioCan Real Estate Investment Trust
Qi Tang
Senior Vice President and Chief Financial Officer
416-866-3033 | www.riocan.com


Contact Information:

RioCan Real Estate Investment Trust
Qi Tang
Senior Vice President and Chief Financial Officer
416-866-3033 | www.riocan.com








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