Fronsac Announces Continuous Per Unit FFO Growth in Its Year End Results and Its Monthly Cash Distributions for the Months of April, May and June 2018

MONTREAL, March 23, 2018 (GLOBE NEWSWIRE) -- (TSX-V: GAZ.UN) Fronsac Real Estate Investment Trust (“Fronsac REIT” or “Fronsac”) today announced its results for the year 2017, and that it will make monthly cash distributions of 0.168¢ per unit, representing 2.016¢ per unit on an annualized basis, on April 30st, May 31th and June 29th 2018 to unitholders of record on April 16th, May 15th and June 15th 2018, respectively.

For the quarter ended December 31th, 2017, Fronsac reported recurring funds from operations ("Recurring FFO") per unit of 0.72¢ compared to 0.67¢ per unit for the quarter ended December 31th, 2016, an increase of 8%. Recurring FFO was $548,042, an increase of 39% ($394,989 in Q4 2016). During Q4 2017 the Trust’s property rental income was $1,316,577 compared to $874,879 in Q4 2016, an increase of 51%. NOI (Net operating Income) was $1,021,095 compared to $737,681 in Q4 2016, an increase of 38%. Fronsac recorded a net income attributable to unitholders of $1,839,189, or 2.41¢ per unit, compared to a gain of $678,913, or 1.15¢ per unit, in Q4 2016.

For the twelve months ended December 31th, 2017, Fronsac reported recurring funds from operations ("Recurring FFO") per unit of 3.17¢ compared to 2.48¢ per unit for the period ended December 31th, 2016, an increase of 28%. Recurring FFO was $2,137,217, an increase of 65% ($1.297,438 in 2016). During 2017 the Trust’s property rental income was $4,359,277 compared to $2,837,021 in 2016, an increase of 54%. NOI (Net operating Income) was $3,487,615 compared to $2,580,709 in 2016, an increase of 35%. Fronsac recorded a net income attributable to unitholders of $4,540,944, or 6.74¢ per unit, compared to net income of $3,196,819, or 6.10¢ per unit, in 2016.

Jason Parravano President and CEO said: “2017 has been a very active year for Fronsac, having completed the purchase of 11 investment properties. In doing so we have continued to grow our per unit results as well as diversify our tenant base.”

The tables below represent other financial highlights as well as the reconciliation from net income to FFO for the periods ended December 31th, 2017 and its comparative period. This information should be read in conjunction with the Audited Consolidated Financials Statements and MD&A for the quarters ended December 31th, 2017 and December 31th, 2016.

SUMMARY OF SELECTED ANNUAL INFORMATION
12 months
Periods ended December 3120172016 Change %
Financial info
Property rental income 4,359,277 2,837,021 1,522,256 54%
Total revenue 4,369,277 2,992,371 1,376,906 46%
NOI (1) 3,487,615 2,580,709 906,906 35%
FFO (1)(4) 2,147,217 1,212,796 934,421 77%
Recurring FFO (1)(4) 2,137,217 1,297,438 839,779 65%
AFFO (1) 2,014,775 1,371,167 643,608 47%
EBITDA (1) 3,013,742 1,915,937 1,097,805 57%
Investment properties (2) 69,588,555 48,065,082 21,523,473 45%
Total assets 70,006,481 48,355,249 21,651,232 45%
Total mortgage/loans/long term debt (3) 31,716,924 24,547,956 7,168,968 29%
Total exchangeable preferred units - 945,830 (945,830)(100%)
Total convertible debentures 250,581 249,149 1,432 1%
Total equity 36,708,396 21,419,308 15,289,088 71%
Weighted average units o/s - basic 67,398,715 52,403,772 14,994,943 29%
Amounts on a per unit basis
FFO 0.0319 0.0231 0.0088 38%
Recurring FFO 0.0317 0.0248 0.0070 28%
AFFO 0.0299 0.0262 0.0037 14%
Distributions 0.0180 0.0161 0.0018 11%
(1) Non-IFRS financial measures
(2) Includes value of investment properties owned through joint ventures
(3) Excludes convertible debentures and exchangeable preferred units
(4) Q1 2016 included revenues of $150K related to a one-time payment received for the renewal of a lease. This amount was subtracted from the Trust’s FFO to arrive at the Recurring FFO for 2016


RECONCILIATION OF NET INCOME TO FFO
3 months
12 months
Periods ended December 312017 2016 Change 2017 2016 Change
Net income (loss) attributable to unitholders1,839,189 678,913 1,160,276 4,540,944 3,196,819 1,344,125
Change in value of investment properties(787,749)(283,708) (504,041) (2,174,622)(2,088,379) (86,243)
Change in value of investment properties in joint ventures(7,260)(19,771) 12,511 (148,900)(47,755) (101,145)
Unit based compensation2,920 (200) 3,120 70,745 40,875 29,870
Change in liability component of exchangeable preferred units7,568 6,596 972 43,832 40,070 3,762
Change in fair value of derivative financial instruments(524,994)(4,620) (520,374) (230,380)48,515 (278,895)
Change in fair value of other financial components13,750 (1,045) 14,795 40,980 3,605 37,375
Income taxes 4,618 18,824 (14,206) 4,618 19,046 (14,428)
FFO(1) - basic548,042 394,989 39% 2,147,217 1,212,796 77%
FFO per unit - basic0.0072 0.0067 8% 0.0319 0.0231 38%
Distributions paid on exchangeable units (if dilutive) - 12,585 (12,585) 15,000 49,720 (34,720)
FFO - diluted548,042 407,574 34% 2,162,217 1,262,516 71%
FFO per unit - diluted0.0072 0.0065 10% 0.0318 0.0228 40%
Recurring FFO - basic548,042 394,989 39% 2,137,217 1,297,438 65%
Recurring FFO per unit - basic0.0072 0.0067 8% 0.0317 0.0248 28%
Distributions385,162 241,441 143,721 1,277,539 851,796 425,742
Distributions per unit0.0045 0.0041 10% 0.0180 0.0161 12%
FFO - basic after distributions0.0027 0.0026 0.0001 0.0139 0.0070 0.0068
Recurring FFO - basic after distributions0.0027 0.0026 0.0001 0.0137 0.0087 0.0051
Distributions as a % of
FFO - basic63%61% 2% 56%70% (13%)
Distributions as a % of
Recurring FFO - basic63%61% 2% 57%65% (8%)
Weighted avg. units o/s
Basic 76,378,013 59,249,263 17,128,750 67,398,715 52,403,772 14,994,943
Diluted 76,378,013 62,337,463 14,040,550 67,980,110 55,491,972 12,488,138
(1) FFO is a Non-IFRS financial measure


About Fronsac -
Fronsac Real Estate Investment Trust is an open-ended trust that acquires and owns high quality triple net and management-free commercial real estate properties.

Forward-Looking Statements - This press release contains forward-looking statements and information as defined by applicable securities laws. Fronsac warns the reader that actual events may differ materially from current expectations due to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated in such statements. Among these include the risks related to economic conditions, the risks associated with the local real estate market, the dependence to the financial condition of tenants, the uncertainties related to real estate activities, the changes in interest rates, the availability of financing in the form of debt or equity, the effects related to the adoption of new standards, as well as other risks and factors described from time to time in the documents filed by Fronsac with securities regulators, including the management report. Fronsac does not update or modify its forward-looking statements even if future events occur or for any other reason, unless required by law or any regulatory authority.

Neither the TSX Venture Exchange Inc., nor its Regulatory Services Provider (as that term is defined in the Policy of the TSX Venture Exchange and its Regulatory Services Provide) accepts any responsibility for the adequacy or accuracy of this release.

The December 31th, 2017 financial statements and management discussion & analysis of Fronsac REIT may be viewed on SEDAR at www.sedar.com

For further information please contact Jason Parravano at (450) 536-5328.

Source: Fiducie de Placement Immobilier Fronsac