Terrafina Third Quarter 2015 Earnings Report

MEXICO CITY--()--Terrafina® (“TERRA”) (BMV: TERRA13), a leading Mexican industrial real estate investment trust (“FIBRA”), externally advised by Prudential Real Estate Investors and dedicated to the acquisition, development, lease and management of industrial real estate properties in Mexico, today announced its third quarter 2015 (3Q15) 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. 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 Operational Highlights as of September 30, 2015

Operational

  • As of September 30, 2015, the occupancy rate was 93.5%, a 210 basis point increase compared to the third quarter of 2014 (3Q14). Additionally, considering the signed letters of intent, occupancy for 3Q15 was 94.0%.
  • Annualized average leasing rate per square foot at 3Q15 was US$4.90, a US$0.12 increase compared to 3Q14.
  • Terrafina reported a total of 28.3 million square feet (msf) of Gross Leasable Area (GLA) comprised of 196 properties and 204 tenants.
  • 3Q15 leasing activity totaled 1.6 msf, of which 21.6% corresponded to new leases, 42.2% to lease renewals and 36.2% to early renewals. Leasing activity was mainly concentrated in the Ciudad Juarez, Chihuahua, Cuautitlan Izcalli, Delicias, San Luis Potosi and Tijuana markets.
  • Total developments as of September 30, 2015 included 579,000 square feet of GLA, which are expected to contribute US$2.7 million to Net Operating Income (NOI) for the 2016 period. The expected return rate for the developments is 12.4%*.

Financial

  • 3Q15 rental revenues reached US$31.8 million, a 4.4% or US$1.5 million decrease compared to 3Q14. It is important to mention that as a result of the asset sale that took place in 1Q15, revenues, NOI and EBITDA for the quarter decreased compared to 3Q14 figures, since 3Q15 did not include these properties.
  • 3Q15 NOI was US$30.6 million, a 6.1% or US$2.0 million decrease compared to 3Q14. Moreover, the implied cap rate was 8.6%, considering that the average share price for 3Q15 was US$1.91 (Ps. 31.27) and the 2015 expected NOI is US$125 million; the NOI margin for 3Q15 reached 91.5%, a 45 basis points increase compared to 3Q14.
  • 3Q15 EBITDA reached US$27.0 million, a decrease of 6.6% or US$1.9 million compared to 3Q14; the EBITDA margin for 3Q15 was 80.8%, a 7 basis point decrease compared to 3Q14.
  • 3Q15 adjusted funds for operations (AFFO) reached US$17.5 million, a 6.0% decrease compared to 3Q14. The AFFO margin for 3Q15 was 52.0%, a 24 basis point increase compared to 3Q14.
  • 3Q15 distributions totaled US$17.5 million. As a result of 3Q15 operations, Terrafina will pay Ps.0.4713 per CBFI (US$0.0288 per CBFI) as distributions corresponding to the July 1 to September 30, 2015 period.
  • The annualized distribution of 3Q15 was US$0.1152; considering the average closing share price for the quarter of US$1.91 (Ps.31.27), Terrafina’s dividend yield for the quarter was 6.0%.

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

For the complete report, please visit our website at http://www.terrafina.mx/
or contact our investor relations department

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

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