Artis Reit is still on track
On May5,2016 Artis released it's first quarter results and it talked about the Fort Mcmurray fires also.Mainly Artis showed a steady stream of gradually increasing operational statistics.There were no large increases here but Artis is definitely diversifying it's portfolio.It recently completed a joint venture in Denver and acquired an office building in Minnesota.True it has eight properties in Fort Mcmurray but reports that there is no damage to any of them.Also it reports that it's Calgary properties represent only 13% of their net operating income(NOI).One leaves their report feeling that Artis is no longer just an Alberta based reit.As it also announces that it is looking at new properties now in Minnesota and Denver and Winnipeg.
Operational Data
Artis tells us that it had a 6% increase in the average rental rate over the same quarter in 2015 although NOI increased by only 1%.Revenues were up from $135 million in 2015 to $139 million in this quarter while funds from operations (FFO) were up by 3% and FFO per share up from $.37 to $.38.The FFO payout ratio dropped from 73% to 71%.Adjusted funds from operations (AFFO) were constant since 2015 as was the debt to gross book value.In total ,this was a flat quarter and shows some stress from the Alberta situation.But this is after it has made two or three significant acquisitions in Denver and Minnesota in the previous quarter.
Many analysts were expecting a slightly better quarter for Artis.It is true that it came slightly ahead of the same quarter in 2015 but analysts (including me) thought that it would do better.My blog on Blogdaleupsome of June3,2015 predicted AFFO per share of $.35 to$.36 while it came in at $.32 per share.click here for details of Blogdaleupsome of June3,2015.But the good news is that with the increase in the price of oil since the last quarter Artis is still on track to hit annual guidance.Annual guidance is for AFFO per share of $1.35 to $1.40 per share.This blog believes that AFFO per share is the best estimate of earnings per share for a reit.If the share price moves up to $14.00 from it's present level then Artis' price/earnings ratio will be at 10 times and very respectable for a tier-one reit that is steadily diversifying.Artis will stay in it's present range of $13.00 to $14.00 for the spring but will gradually move up in the summer as oil stays in the $42 to $48 per barrel range. use Blogdaleupsome for analysis of Cdn. reits ;count on Blogdaleupsome for analysis of Cdn. reits ;click here for summer forecast on Artis reit
Operational Data
Artis tells us that it had a 6% increase in the average rental rate over the same quarter in 2015 although NOI increased by only 1%.Revenues were up from $135 million in 2015 to $139 million in this quarter while funds from operations (FFO) were up by 3% and FFO per share up from $.37 to $.38.The FFO payout ratio dropped from 73% to 71%.Adjusted funds from operations (AFFO) were constant since 2015 as was the debt to gross book value.In total ,this was a flat quarter and shows some stress from the Alberta situation.But this is after it has made two or three significant acquisitions in Denver and Minnesota in the previous quarter.
Many analysts were expecting a slightly better quarter for Artis.It is true that it came slightly ahead of the same quarter in 2015 but analysts (including me) thought that it would do better.My blog on Blogdaleupsome of June3,2015 predicted AFFO per share of $.35 to$.36 while it came in at $.32 per share.click here for details of Blogdaleupsome of June3,2015.But the good news is that with the increase in the price of oil since the last quarter Artis is still on track to hit annual guidance.Annual guidance is for AFFO per share of $1.35 to $1.40 per share.This blog believes that AFFO per share is the best estimate of earnings per share for a reit.If the share price moves up to $14.00 from it's present level then Artis' price/earnings ratio will be at 10 times and very respectable for a tier-one reit that is steadily diversifying.Artis will stay in it's present range of $13.00 to $14.00 for the spring but will gradually move up in the summer as oil stays in the $42 to $48 per barrel range. use Blogdaleupsome for analysis of Cdn. reits ;count on Blogdaleupsome for analysis of Cdn. reits ;click here for summer forecast on Artis reit
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