Killam Properties Inc. (TSX:KMP/KMP:DB) today announced its financial results for the third quarter ended September 30, 2008.
Highlights of Killam's Q3 Financial Results
- Increased funds from operations ("FFO") per share by 15.8% to $0.22, from $0.19 generated during the third quarter of 2007.
- Produced FFO of $7.5 million, a 21.2% increase from $6.2 million generated during the third quarter of 2007.
- Increased total operating revenue by 16.5% to $25.7 million, from $22.1 million in the third quarter of 2007.
- Generated net operating income ("NOI") of $16.3 million, a 13.7% increase from $14.3 million generated during the third quarter of 2007.
- Achieved 4.4% consolidated same store NOI growth.
- Completed 27 manufactured home sales and home sale placements for a total of 66 home sales and home sale placements year-to-date.
- Completed three acquisitions totaling 370 units for $11.4 million.
FFO Per Share Increased by 15.8%
Management considers FFO per share to be a key measure of operating performance. FFO per share for the third quarter of 2008 increased by 15.8% to $0.22, from $0.19 in the same period of 2007. FFO per share for the nine months ended September 30, 2008 increased by 4.2% to $0.50, from $0.48 in 2007. The increase relates primarily to improved occupancy in the apartment portfolio, increased average rents for the portfolio and the positive impact of home sales. The improvements in revenue contributed positively to FFO per share, notwithstanding large increases in oil expense, natural gas expense, and property tax expense in 2008.
Killam Achieved the Highest Occupancy in its History
Killam experienced the strongest occupancy in its history during the third quarter, following strong leasing activity across all its core apartment markets in Atlantic Canada. Positive trending over the last two quarters continued through to September, typically Killam's strongest month, when apartment portfolio-wide occupancy levels hit 98.2%. Strong occupancy levels have continued subsequent to the end of the third quarter, with occupancy in October at 98.0%, a 300 basis point improvement in apartment occupancy from October 2007.
Killam believes that the improvements in occupancy are attributable to Killam's strong brand and the underlying economic strength throughout Atlantic Canada, especially Newfoundland and New Brunswick.
Quarter End Vacancy at 1.3% at September 30, 2008
Consolidated vacancy was 1.3% at September 30, 2008, a positive improvement from 2.7% at June 30, 2008 and 2.6% at September 30, 2007. The apartment portfolio had a vacancy rate of 1.8% with an average monthly rent of $722. The apartment vacancy was 210 basis points better than the vacancy of 3.9% at September 30, 2007. The MHC portfolio had a vacancy rate of 0.8%, with an average monthly rent of $217. Not included in the MHC vacancy numbers are 81 MHC sites that had not been previously rented, including some recently expanded sites, and 376 transient sites in Killam's seasonal resort portfolio. These units are excluded in the table below, which represents available units at September 30, 2008. -- www.cnxmarketlink.com
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