Terrafina Fourth Quarter and Full Year 2016 Earnings Report

MEXICO CITY--()--Terrafina® (BMV:TERRA13) (“TERRA” or “the Company”), a leading Mexican industrial real estate investment trust (“FIBRA”), externally advised by PGIM Real Estate and dedicated to the acquisition, development, leasing and management of industrial real estate properties in Mexico, today announced its earnings results for the fourth quarter 2016 (4Q16) and full year 2016.

The figures in this report have been prepared in accordance with International Financial Reporting Standards (“IFRS”). Figures presented in this report are presented in millions of Mexican pesos and millions of U.S. dollars, unless otherwise stated. Additionally, figures may vary due to rounding.

Terrafina’s financial statements that are included in this report are internal and have not yet been audited by the external auditors, nor have they been approved at the Ordinary Shareholders’ Meeting. As a result, the mentioned figures in this financial report are preliminary figures and could be adjusted in the future. Once the audited 2016 financial statements are available and have been approved by the Annual Ordinary Shareholders’ Meeting, these will be made available to the market as per applicable law.

This document may include forward-looking statements that may imply risks and uncertainties. Terms such as "estimate", "project", "plan", "believe", "expect", "anticipate", "intend", and other similar expressions could be construed as previsions or estimates. Terrafina warns readers that declarations and estimates mentioned in this document, or realized by Terrafina’s management imply risks and uncertainties that could change in function of various factors that are out of Terrafina’s control. Future expectations reflect Terrafina’s judgment at the date of this document. Terrafina reserves the right or obligation to update the information contained in this document or derived from this document. Past or present performance is not an indicator to anticipate future performance.

Financial and Operating Highlights as of December 31, 2016

Operating

  • As of December 31, 2016, the occupancy rate was 94.8%, a 160 basis point increase compared to the fourth quarter of 2015 (4Q15). Additionally, considering signed letters of intent (LOI), occupancy for 4Q16 was 95.2%.
  • Annualized average leasing rate per square foot at the year-end was US$4.88.
  • Terrafina reported a total of 30.5 million square feet (msf) of Gross Leasable Area (GLA) comprised of 209 properties and 218 tenants at the end of 2016.
  • 2016 leasing activity totaled 6.7 msf, of which 31.1% corresponded to new leases, 24.1% to lease renewals and 44.8% to early renewals. Leasing activity was mainly concentrated in the Chihuahua, Ciudad Juarez, Queretaro, Ramos Arizpe, Cuautitlan Izcalli, San Luis Potosi, Monterrey, Tijuana, Toluca, Saltillo, Irapuato, and Apodaca markets.
  • Total developments for 2016 included 620,000 square feet of GLA, which are expected to contribute US$3.1 million to Net Operating Income (NOI) for the 2017 period. The expected return rate for the developments is 10.5%*.

*Expected return is not guaranteed. Final results may vary.

Financial

  • FY2016 rental revenues reached US$131.7 million, of which US$33.4 million were generated during 4Q16; a 5.9% or US$1.9 million increase compared to 4Q15.
  • FY2016 NOI was US$131.8 million, of which US$33.1 million were generated during 4Q16; a 7.5% or US$2.3 million increase compared to 4Q15.
  • The NOI margin reached 92.1% for FY2016 and 92.9% in 4Q16, a 180 basis point increase compared to 4Q15.
  • FY2016 EBITDA reached US$118.2 million, of which US$29.6 million were generated in 4Q16, an increase of 9.7% or US$2.6 million compared to 4Q15.
  • The EBITDA margin for 2016 was 82.5% and 82.9% for 4Q16, a 306 basis point increase compared to 4Q15.
  • FY2016 adjusted funds for operations (AFFO) reached US$74.5 million, of which US$20.4 million were generated in 4Q16, an increase of 23.4% or US$3.9 million compared to 4Q15.
  • The AFFO margin for 2016 was 52.7% and 56.8% in 4Q16, a 877 basis point increase compared to 4Q15.
  • FY2016 distributions totaled US$74.5 million while distributions per CBFI totaled US$0.1227; considering the average share price for 2016 of US$1.62 (Ps.30.16), Terrafina’s dividend yield for the year was 7.6%.
  • 4Q16 distributions totaled US$20.4 million. As a result, Terrafina will distribute Ps.0.6593 per CBFI (US$0.0355 per CBFI) for the October 1 to December 31, 2016 period; considering the average share price for 4Q16 of US$1.49 (Ps. 29.48), Terrafina’s dividend yield for 4Q16 was 8.9%.

For access to the complete report, please visit our web site at www.terrafina.mx

Contacts

In Mexico City:
Terrafina
Francisco Martinez, +52 (55) 5279-8107
Investor Relations Officer
francisco.martinez@terrafina.mx

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