Terrafina Third 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 third quarter 2016 (3Q16) 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 September 30, 2016

Operating

  • As of September 30, 2016, the occupancy rate was 92.8%, a 70 basis point decrease compared to the third quarter of 2015 (3Q15). Additionally, considering signed letters of intent (LOI), occupancy for 3Q16 was 94.8%.
  • Annualized average leasing rate per square foot at 3Q16 was US$4.89, a US$0.01 decrease compared to 3Q15.
  • For 3Q16, Terrafina reported a total of 30.1 million square feet (msf) of Gross Leasable Area (GLA) comprised of 209 properties and 211 tenants.
  • Total leasing activity for 3Q16 reached 1.3 msf, of which 18.1% corresponded to new leases, 60.1% to lease renewals and 21.8% to early renewals. Leasing activity was mainly concentrated in the Cuautitlan Izcalli, Ciudad Juarez, Reynosa, Chihuahua, Queretaro, San Luis Potosi, Monterrey, Guanajuato and Guadalajara markets.
  • Total developments as of September 30, 2016 reached 432,000 square feet of GLA, which are expected to contribute US$2.2 million to Net Operating Income (NOI) for the 2017 period. The expected return rate for the developments that took place during 3Q16 is 9.9%*.

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

Financial

  • 3Q16 rental revenues reached US$32.9 million, a 3.5% or US$1.1 million increase compared to 3Q15.
  • 3Q16 NOI was US$33.9 million, a 10.9% or US$3.3 million increase compared to 3Q15. Moreover, the implied cap rate was 9.4%, considering the average share price of US$1.65 (Ps.30.84) for 3Q16 and an expected NOI of US$133 million for 2016.
  • The NOI margin for 3Q16 reached 94.3%, a 278 basis point increase compared to 3Q15.
  • 3Q16 EBITDA reached US$30.5 million, an increase of 12.9% or US$3.5 million compared to 3Q15.
  • The EBITDA margin for 3Q16 was 84.8%, a 399 basis point increase compared to 3Q15.
  • 3Q16 adjusted funds for operations (AFFO) reached US$18.5 million, a US$1.0 million increase compared to 3Q15.
  • The AFFO margin for 3Q16 was 52.9 %, a 92 basis point increase compared to 3Q15.
  • 3Q16 distributions totaled US$18.5 million. As a result of 3Q16 operations, Terrafina will distribute Ps.0.5703 per CBFI (US$0.0305 per CBFI) as distributions corresponding to the July 1 to September 30, 2016 period.
  • The annualized distribution was US$0.1219; considering the average share CBFI price for the quarter of US$1.65 (Ps.30.84), Terrafina’s dividend yield for the quarter was 7.4%.

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

Contacts

In Mexico City:
Terrafina
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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