HALIFAX,
NS, Aug. 17, 2023 /CNW/ -
(TSXV: NXLV) – NexLiving Communities Inc.
("NexLiving" or the "Company") announced operating and financial
results for the three- and six-month periods ended June 30, 2023.
Stavro Stathonikos, President
& CEO commented: "NexLiving continues to deliver on its growth
objectives with +41% year-over-year unit growth and +10.2% organic
NOI growth. These results are a testament to our dedicated team
and the trust our valued stakeholders place in us. As we
move forward, NexLiving will continue to deploy capital into
accretive acquisitions and scale up our strategy to create a
portfolio of modern mid-cap buildings in secondary markets across
Canada".
Summary of Results
- Suite count increased from 827 to 1,166 (+41% Y/Y).
- Property revenue increased +61% to $4.7
million for the three-month period and +63% to $8.9 million for the six-month period ended
June 30, 2023.
- Net operating income ("NOI") increased +59% to $2.8 million (60.3% margin) for the three-month
period and +69% to $5.2 million
(58.0% margin) for the six-month period ended June 30, 2023.
- Same property NOI increased +7.8% for the three-month period,
driven by an +8.4% increase in same property revenue and a +9.4%
increase in same property expenses. The increase in expenses is
primarily due to a one-time $108,000
reversal of property tax provisions in Q2 2022.
- Same property NOI increased +10.2% for the six-month period as
revenue growth of +7.2% outpaced the +3.4% increase in same
property expenses. The six-month period was not impacted by the
aforementioned reversal of property tax provisions.
- The portfolio remained highly occupied at 98.2% at June 30, 2023. New
Brunswick occupancy was 99.0% and Ontario occupancy was 90.7%, as approximately
half of the overall portfolio vacant units were attributable to the
Company's suite repositioning program in the Ontario market.
- FFO per share decreased -8% for the three-month period and grew
+26% for the six-month period on a fully diluted basis.
Q2 2023 Operating and Financial Highlights:
As at
|
30-Jun-23
|
31-Dec-22
|
Change
|
Number of
suites
|
1,166
|
1,016
|
150
|
Occupancy
|
98.2 %
|
96.8 %
|
145 bps
|
Debt to GBV*
|
67.8 %
|
66.0 %
|
188 bps
|
Weighted average term
to debt maturity (years)
|
4.3
|
2.8
|
1.5 yrs
|
Weighted average
contractual interest rate
|
3.62 %
|
2.99 %
|
63 bps
|
Net asset
value
|
80,999,819
|
69,896,825
|
15.9 %
|
Net asset value per
share
|
0.242
|
0.238
|
1.7 %
|
For the three months
ended June 30
|
2023
|
2022
|
Change
|
NOI
|
2,838,998
|
1,787,610
|
58.8 %
|
NOI margin
|
60.3 %
|
61.2 %
|
(93)
bps
|
FFO*
|
592,596
|
594,532
|
(0.3) %
|
FFO (cents per share) -
diluted*
|
0.18
|
0.19
|
(8.2) %
|
FFO payout
ratio*
|
28 %
|
26 %
|
232 bps
|
Same property
revenue*
|
2,745,479
|
2,533,202
|
8.4 %
|
Same property operating
expenses*
|
1,076,630
|
984,434
|
9.4 %
|
Same property
NOI*
|
1,668,849
|
1,548,768
|
7.8 %
|
Same property NOI
margin*
|
60.8 %
|
61.1 %
|
(35)
bps
|
For the six months
ended June 30
|
2023
|
2022
|
Change
|
NOI
|
5,168,162
|
3,065,699
|
68.6 %
|
NOI margin
|
58.0 %
|
56.0 %
|
197 bps
|
FFO*
|
1,148,209
|
865,047
|
32.7 %
|
FFO (cents per share) -
diluted*
|
0.36
|
0.28
|
26.0 %
|
FFO payout
ratio*
|
28 %
|
35 %
|
(728) bps
|
Same property
revenue*
|
5,450,934
|
5,086,547
|
7.2 %
|
Same property operating
expenses*
|
2,335,747
|
2,259,691
|
3.4 %
|
Same property
NOI*
|
3,115,187
|
2,826,856
|
10.2 %
|
Same property NOI
margin*
|
57.1 %
|
55.6 %
|
157 bps
|
*Refer to section
"Non-IFRS Financial Measures"
|
Fair Value of Investment
Properties:
The Company's weighted average capitalization rate as at
June 30, 2023, decreased to 4.68%
from 4.69% at December 31, 2022. The
decrease was primarily due to the acquisition of new
properties.
For the Company's same property portfolio, the weighted average
capitalization rate increased to 4.81% at June 30, 2023, from 4.74% as at December 31, 2022. The increase in capitalization
rates reflects the uncertain macroeconomic environment and current
interest rate levels. The gain in fair value recorded by the
Company in the three-month and six-month periods primarily reflects
forecasted NOI growth due to expected rent increases, which more
than offset the impact of higher capitalization rates.
Share Consolidation:
The Company commenced trading on the TSX Venture Exchange on a
one-new-for-20-old consolidated basis effective August 3, 2023. As a result, the number of issued
and outstanding shares was reduced from 330,782,648 to 16,539,133.
All share, per share and share-related amounts related to periods
prior to June 30, 2023 reflect the
pre-consolidation shares.
NCIB Activity:
The Company repurchased 34,850 common shares under its Normal
Course Issuer Bid at a weighted average price of $2.49 per share on a post-consolidation basis.
All purchases were done subsequent to June
30, 2023.
Dividend:
The Company's board of directors has approved and declared a
dividend of $0.01 per common share on
a post-consolidation basis for the quarter ending September 30, 2023, representing $0.04 per share on a post-consolidation and
annualized basis. The dividend is payable on, or after September 29, 2023, to shareholders of record at
the close of business on September 8,
2023.
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
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 1,166 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.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 17, 2023. 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
August 17, 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 August 17,
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.