Terrafina Second Quarter 2016 Earnings Report

MEXICO CITY--()--Terrafina® (“TERRA”) (BMV: TERRA13), 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 second quarter 2016 (2Q16) earnings results.

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 results included in this report are unaudited. As a result, the mentioned figures in this financial report are preliminary figures and could be adjusted in the future.

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 June 30, 2016

Operating

  • As of June 30, 2016, the occupancy rate was 93.2%, a 11 basis point increase compared to the second quarter of 2015 (2Q15). Additionally, considering signed letters of intent (LOI), occupancy for 2Q16 was 94.2%.
  • Annualized average leasing rate per square foot at 2Q16 was US$4.88, a US$0.01 decrease compared to 2Q15.
  • For 2Q16, Terrafina reported a total of 30.0 million square feet (msf) of Gross Leasable Area (GLA) comprised of 208 properties and 215 tenants.
  • Total leasing activity for 2Q16 reached 1.2 msf, of which 19.9% corresponded to new leases, 67.0% to lease renewals and 13.1% to early renewals. Leasing activity was mainly concentrated in the Chihuahua, Ciudad Juarez, Ramos Arizpe, Tijuana, Monterrey, Silao, Cuautitlan Izcalli and Queretaro markets.
  • Total developments at June 30, 2016 reached 260,000 square feet of GLA, which are expected to contribute US$1.3 million to Net Operating Income (NOI) for the 2017 period. The expected return rate for the developments that took place in 2Q16 is 9.4%*.

Financial

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

  • 2Q16 rental revenues reached US$32.9 million, a 4.0% or US$1.3 million increase compared to 2Q15.
  • 2Q16 NOI was US$33.0 million, a 9.1% or US$2.8 million increase compared to 2Q15. Moreover, the implied cap rate was 9.2%, considering the average share price of US$1.71 (Ps. 30.84) for 2Q16 and an expected NOI of US$133 million for 2016.
  • The NOI margin for 2Q16 reached 94.3%, a 312 basis point increase compared to 2Q15.
  • 2Q16 EBITDA reached US$29.6 million, an increase of 8.7% or US$2.4 million compared to 2Q15.
  • The EBITDA margin for 2Q16 was 84.3%, a 250 basis point increase compared to 2Q15.
  • 2Q16 adjusted funds from operations (AFFO) reached US$19.0 million, a US$0.6 million decrease compared to 2Q15.
  • The AFFO margin for 2Q16 was 53.9%, a 469 basis point decrease compared to 2Q15.
  • 2Q16 distributions totaled US$19.0 million. As a result of 2Q16 operations, Terrafina will distribute Ps.0.5650 per CBFI (US$0.0313 per CBFI) for distributions corresponding to the January 1 to June 30, 2016 period.
  • The annualized distribution was US$0.1252; considering the average share price for the quarter of US$1.71 (Ps.30.84), Terrafina’s dividend yield for the quarter was 7.3%.

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

Contacts

Terrafina
in Mexico City:
Francisco Martinez/ Angel Bernal
Investor Relations Officer / Chief Financial Officer
+52 (55) 5279-8107 / +52 (55) 5279-8109
francisco.martinez@terrafina.mx / angel.bernal@terrafina.mx

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