HALIFAX,
NS, April 14, 2023 /CNW/ - (TSXV:
NXLV) – NexLiving Communities Inc. ("NexLiving" or
the "Company") announced operating and financial results for the
three months and year ended December 31,
2022.
Stavro Stathonikos, President
& CEO commented: "We achieved strong operating and financial
results for 2022, with same-property NOI growth coming in at 6.1%
for 2022. Our acquisitions and rent increases more than offset the
impact of higher interest rates and drove an 84% year over year
growth in FFO per share."
Summary of Q4 and 2022 Results
- Property revenue increased +61% to $3.3
million for the three-month period and +58% to $11.9 million for the year, driven by the
acquisition of high quality properties and rental rate increases
during the period.
- Net operating income ("NOI") increased +56% to $1.8 million (54.8% margin) for the three-month
period and +57% to $6.7 million
(56.2% margin) for the year.
- Suite count increased to 1,016 from 705 (+44% Y/Y) at
December 31, 2021 as the Company
continued to execute on its acquisition pipeline. Subsequent to
year-end, the Company completed the acquisition of an additional
150 suites (see Subsequent Events).
- Same-property NOI increased +1.4% for the fourth quarter and
+6.1% for the year. During the fourth quarter, the Company recorded
approximately $42,000, in
non-recurring property management expenses associated with a
transition of certain properties to a new property manager,
partially offset by rental rate increases and cost controls.
Excluding the one-time property management transition costs,
same-property NOI increased +5.7% for the quarter and 7.2% for the
year.
- The portfolio remained highly occupied at 96.8% at December 31, 2022, down 211 basis points from a
year ago. Approximately 40% of the vacant units were attributable
to the Company's suite repositioning program in the Ontario market, which is progressing ahead of
expectations. Occupancy at the Company's New Brunswick properties was 97.9% and the
majority of vacant units have been re-leased subsequent to year-end
at higher rents as attractive supply and demand fundamentals
continue to persist.
- FFO per share grew +128% for the fourth quarter and +84% for
2022, on a fully diluted basis.
Q4 and FY2022 Operating and Financial Highlights:
As at December
31
|
2022
|
2021
|
Change
|
Number of investment
properties
|
30
|
25
|
5
|
Number of
suites
|
1,016
|
705
|
311
|
Occupancy
|
97 %
|
99 %
|
-211 bps
|
Debt to total
assets
|
66.0 %
|
57.7 %
|
8.3 %
|
Debt to GBV*
|
66.0 %
|
65.7 %
|
24 bps
|
Weighted average term
to debt maturity (years)
|
2.8
|
2.1
|
0.7 yrs
|
Weighted average
contractual interest rate
|
2.99 %
|
2.12 %
|
87 bps
|
Investment
properties
|
203,071,000
|
125,162,000
|
62.2 %
|
Total assets
|
205,715,083
|
143,758,717
|
43.1 %
|
Total
liabilities
|
135,818,258
|
82,956,832
|
63.7 %
|
Net asset
value
|
69,896,825
|
60,801,885
|
15.0 %
|
Net asset value per
share
|
0.24
|
0.22
|
10.4 %
|
|
|
|
|
For the three months
ended December 31
|
2022
|
2021
|
Change
|
Rental
income
|
3,300,364
|
2,056,306
|
60.5 %
|
NOI
|
1,808,085
|
1,162,446
|
55.5 %
|
NOI margin
|
54.8 %
|
56.5 %
|
-175 bps
|
Net
income
|
2,366,603
|
3,988,755
|
(40.7) %
|
FFO*
|
499,818
|
155,318
|
221.8 %
|
FFO (cents per share) -
diluted*
|
0.17
|
0.07
|
128.4 %
|
Dividends declared
(cents per share)
|
0.05
|
0.05
|
-
|
Weighted average units
outstanding - diluted
|
294,999,511
|
209,394,033
|
40.9 %
|
Same property
revenue*
|
1,847,588
|
1,775,704
|
4.0 %
|
Same property operating
expenses*
|
866,827
|
808,176
|
7.3 %
|
Same property
NOI*
|
980,761
|
967,528
|
1.4 %
|
Same property NOI
margin*
|
53.1 %
|
54.5 %
|
-140 bps
|
|
|
|
|
For the year ended
December 31
|
2022
|
2021
|
Change
|
Rental
income
|
11,864,526
|
7,525,715
|
57.7 %
|
NOI
|
6,670,444
|
4,251,009
|
56.9 %
|
NOI margin
|
56.2 %
|
56.5 %
|
-26 bps
|
Net
income
|
7,513,188
|
9,404,367
|
-20.1 %
|
FFO*
|
1,859,846
|
609,314
|
205.2 %
|
FFO (cents per share) -
diluted*
|
0.63
|
0.34
|
83.6 %
|
Dividends declared
(cents per share)
|
0.20
|
0.20
|
0.0 %
|
Weighted average units
outstanding - diluted
|
295,261,040
|
177,635,604
|
66.2 %
|
Same property
revenue*
|
7,264,811
|
6,910,549
|
5.1 %
|
Same property operating
expenses*
|
3,219,536
|
3,096,876
|
4.0 %
|
Same property
NOI*
|
4,045,275
|
3,813,673
|
6.1 %
|
Same property NOI
margin*
|
55.7 %
|
55.2 %
|
50 bps
|
*Refer to section
"Non-IFRS Financial Measures"
|
Acquisition Activity:
On December 16, 2022, the Company
acquired a portfolio of two properties in Saint John, New Brunswick for $34.3 million. The acquisition included an
adjacent parcel of land that is approved for a future development
project of up to 85 units. Including the land parcel in the
acquisition price, the blended capitalization rate is 4.75%. The
consideration was satisfied with a combination of cash on hand and
$25.7 million of mortgages bearing
interest at a weighted average interest rate of 3.06% with a
weighted term to maturity of 3.5 years.
Fair Value of Investment Properties:
The Company's weighted average capitalization rate as at
December 31, 2022, decreased to 4.69%
from 4.75% at December 31, 2021. The
decrease was primarily due to the acquisition of five properties
during 2022, of which two were in Ontario and are valued at a capitalization
rate below the portfolio average. This was partially offset by an
expansion in the capitalization rates used to value the majority of
the Company's properties. For the Company's same-property
portfolio, the weighted average capitalization rate was 4.72% as at
December 31, 2022 (2021 – 4.64%). 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.
Subsequent Events
On February 28, 2023, the Company
completed the acquisition of a 100% interest in Northpoint
Management Inc. ("Northpoint") from Sheaco Holdings Inc.
Northpoint's assets consist of two multi-family buildings
comprising 75 units each located at 2251 Mountain Road and 2261
Mountain Road, Moncton, New
Brunswick. The $39.6 million
purchase price for the acquisition was paid by the issuance of 37.5
million common shares at a price of $0.20 per share for deemed proceeds of
$7.5 million, a $30.7 million mortgage bearing interest at 4.19%
with a ten-year term and a $1.0
million bridge loan with the remainder using cash on
hand.
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 in Atlantic
Canada and Ontario. 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 1- and 2-bedroom 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
1,166 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 dated April 13, 2023, 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 April 13,
2023. 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.