Artis Realty reports a little growth
Artis Reit reported first quarter results on May7,2015.This is blogged in Blogdaleupsome so I add that all information has not been taken from it's press release.It has been corroborated with information in other databases.It reports growth in net operating income (NOI) of 5% for same properties and a total increase of NOI of 7.5%.This means that continuously owned properties had a 5% increase in revenue but including new properties there was a 7.5% increase.It also improved it's AFFO payout ratio and the average weighted rental rate.These are the main indicators mentioned in the press release.Artis also mentions that it entered into a joint venture agreement for an office property in Denver worth $20 million.
Operating Statistics
Investors might have suspected that the drop in the price of oil might have had a big impact on Artis which is headquartered in Winnipeg.Artis states that their occupancy rate remained unchanged at about 95% and the average weighted rental rate increased by 6%.So surprisingly operating revenue only registered a slight increase over the last quarter.This did allow both AFFO and FFO per unit to increase by 6%.This is the best measure of earnings per share for a REIT.
The financial statistics improved slightly as well.Both the AFFO and FFO payout ratio improved slightly by 2%.The ratio of mortgages and loans to gross book value (GBV) dropped very slightly down to 40.6%.This is considered to be a low value in the REIT sector.While the interest rate coverage ratio remained at 2.89 times which is also considered quite low.So Artis has kept it's debt quite well managed and it's payout ratio a little high but coming down.
Overview
Artis has made few acquisitions and has had fairly flat revenues since the end of 2013.It did make a small acquisition in this quarter worth $20 million.It's operating income has been fairly flat also.It's EBITDA excluding extraordinary items has been relatively constant.But this quarter earnings turned negative as Artis took an almost $50 million asset writedown.That spoiled net income for this quarter and maybe for the year.But this is an extraordinary item and not indicative of performance. AFFO per share is a better measure of performance.It is on track to hit $1.35 to $1.40 per share for the year.This will easily support their dividend and make the price/earnings ratio only at 10 times which is a relatively cheap at $14 to $15 a share.However house prices and rents are improving in Western Canada and this should make for a better second quarter.This blog predicts that Artis will have a better second quarter and AFFO per share may hit $.35 or $.36 per share.This will put Artis on track to return to $15 a share.
Operating Statistics
Investors might have suspected that the drop in the price of oil might have had a big impact on Artis which is headquartered in Winnipeg.Artis states that their occupancy rate remained unchanged at about 95% and the average weighted rental rate increased by 6%.So surprisingly operating revenue only registered a slight increase over the last quarter.This did allow both AFFO and FFO per unit to increase by 6%.This is the best measure of earnings per share for a REIT.
The financial statistics improved slightly as well.Both the AFFO and FFO payout ratio improved slightly by 2%.The ratio of mortgages and loans to gross book value (GBV) dropped very slightly down to 40.6%.This is considered to be a low value in the REIT sector.While the interest rate coverage ratio remained at 2.89 times which is also considered quite low.So Artis has kept it's debt quite well managed and it's payout ratio a little high but coming down.
Overview
Artis has made few acquisitions and has had fairly flat revenues since the end of 2013.It did make a small acquisition in this quarter worth $20 million.It's operating income has been fairly flat also.It's EBITDA excluding extraordinary items has been relatively constant.But this quarter earnings turned negative as Artis took an almost $50 million asset writedown.That spoiled net income for this quarter and maybe for the year.But this is an extraordinary item and not indicative of performance. AFFO per share is a better measure of performance.It is on track to hit $1.35 to $1.40 per share for the year.This will easily support their dividend and make the price/earnings ratio only at 10 times which is a relatively cheap at $14 to $15 a share.However house prices and rents are improving in Western Canada and this should make for a better second quarter.This blog predicts that Artis will have a better second quarter and AFFO per share may hit $.35 or $.36 per share.This will put Artis on track to return to $15 a share.
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