Terrafina Fourth Quarter and Full Year 2017 Earnings Report

MEXICO CITY--()--Terrafina® (“TERRA” or “the Company”) (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 fourth quarter 2017 (4Q17) and full year 2017 (FY2017) 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 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 2017 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.

Operating and Financial Highlights as of December 31, 2017

Operating

  • As of December 31, 2017, the occupancy rate was 95.5%, a 64 basis point increase compared to the fourth quarter of 2016 (4Q16). Additionally, considering signed letters of intent (LOI), occupancy for 4Q17 was 95.6%.
  • Annualized average leasing rate per square foot at the year-end was US$5.04, a US$0.16 increase compared to 4Q16.
  • At the conclusion of 2017, Terrafina reported a total of 40.6 million square feet (msf) of Gross Leasable Area (GLA) comprised of 284 properties and 299 tenants.
  • 2017 leasing activity totaled 6.3 msf, of which 24.1% corresponded to new leases, 47.6% to lease renewals and 28.3% to early renewals. Leasing activity was mainly concentrated in the Chihuahua, Ciudad Juarez, Cuautitlan Izcalli, Ramos Arizpe, Reynosa, Monterrey, Queretaro, San Luis Potosi, Toluca, Tijuana, Apodaca, Irapuato, Puebla and Monclova markets.

Financial

  • FY2017 rental revenues reached US$166.9 million, of which US$43.8 million were generated during 4Q17; a 31.2% or US$10.4 million increase compared to 4Q16.
  • FY2017 NOI was US$166.8 million, of which US$44.0 million was generated during 4Q17; a 32.9% or US$10.9 million increase compared to 4Q16.
  • The NOI margin reached 92.0% in FY2017 and 93.0% in 4Q17, a 7 basis point increase compared to 4Q16.
  • FY2017 EBITDA reached US$150.3 million, of which US$39.6 million was generated in 4Q17, an increase of 33.9% or US$10.0 million compared to 4Q16.
  • The EBITDA margin for 2017 was 83.0% and 83.6% for 4Q17, a 67 basis point increase compared to 4Q16.
  • FY2017 adjusted funds for operations (AFFO) reached US$95.0 million, of which US$25.6 million was generated in 4Q17, an increase of 25.8% or US$5.3 million compared to 4Q16.
  • The AFFO margin was 52.4% for 2017 and 54.1% in 4Q17, a 276 basis point decrease compared to 4Q16.
  • Total distribution for FY2017 were US$95.0 million; distributions per CBFI were US$0.1286. Considering the average share price for 2017 of US$1.62 (Ps.30.65), Terrafina’s dividend yield for the year was 8.0%.
  • 4Q17 distributions totaled US$25.6 million. As a result, Terrafina will distribute Ps.0.6130 per CBFI (US$0.0324 per CBFI) for the October 1 to December 31, 2017 period; considering the average share price of US$1.59 for 4Q17 (Ps.30.20), Terrafina’s dividend yield for the quarter was 8.1%.

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

About Terrafina

Terrafina (BMV:TERRA13) is a Mexican real estate investment trust formed primarily to acquire, develop, lease and manage industrial real estate properties in Mexico. Terrafina’s portfolio consists of attractive, strategically located warehouses and other light manufacturing properties throughout the Central, Bajio and Northern regions of Mexico. It is internally managed by highly-qualified industry specialists and externally advised by PGIM Real Estate.

Terrafina owns 296 real estate properties, including 284 developed industrial facilities with a collective GLA of approximately 40.6 million square feet and 12 land reserve parcels, designed to preserve the organic growth capability of the portfolio.

Terrafina’s objective is to provide attractive risk-adjusted returns for the holders of its certificates through stable distributions and capital appreciations. Terrafina aims to achieve this objective through a successful performance of its industrial real estate and complementary properties, strategic acquisitions, access to a high level of institutional support, and to its management and corporate governance structure. For more information, please visit 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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