Parkit Enterprise Reports Q3 2024 Results
Parkit Enterprise Inc. (“Parkit” or the “Company”) (TSXV: PKT), is pleased to report its third quarter 2024 results. Steven Scott, Chair of Parkit, commented:
“Parkit continued to grow its net rental income and margins in Q3 2024, resulting in a same property NOI increase of 16% for the quarter. We renewed 70,000 square feet of leases at 42% higher rates and signed new leases on 36,000 square feet of space. We continue to maintain a strong balance sheet with 95% of our debt being fixed, and will continue to be disciplined on acquisitions, and we expect to increase revenue, NRI and FFO in the upcoming year.”
- Investment properties revenue and net rental income. Investment properties revenue and net rental income increased as the Company signed new leases and streamlined operations from prior year acquisitions. Investment properties revenue rose 18% and 28% to $6,700,904 and $19,091,687, for the three and nine months ended September 30, 2024 compared to $5,671,599 and $14,900,662, for the three and nine months ended September 30, 2023. Net rental income (“NRI”), increased by 19% and 35%, to $4,539,587 and $12,826,768, for the three and nine months ended September 30, 2024 compared to $3,826,615 and $9,468,132, for the three and nine months ended September 30, 2023.
- Stabilized investment properties net rental income. The Company’s stabilized properties net rental income, increased by 13% and 25%, to $4,593,210 and $12,995,063, for the three and nine months ended September 30, 2024 compared to $4,056,324 and $10,371,195, for the three and nine months ended September 30, 2023.
- Stabilized comparative properties NOI increased for the period. Stabilized comparative properties NOI, a Non-IFRS Measure, increased 16% and 19%, to $2,587,090 and $7,650,463, for the three and nine months ended September 30, 2024 compared to $2,233,930 and $6,439,552, for the three and nine months ended September 30, 2023, as the Company executed renewals with tenants and maximized occupancy.
- Funds from operations (“FFO”) increased for the period. The FFO, a Non-IFRS Measure, rose 45% and 73% to $1,839,044 and $4,728,177, for the three and nine months ended September 30, 2024, compared to FFO of $1,264,167 and $2,725,803, for the three and nine months ended September 30, 2023. The increase in FFO was the result of additional NRI from investment properties offset by higher financing costs.
- Liquidity position. As at September 30, 2024 the Company maintained a strong liquidity position with cash and cash equivalents of over $7,752,849, unencumbered assets and significant availability on its credit facilities to fund future acquisitions.
- Cash flows. Parkit’s cash flow from operations was $12,664,922 for the nine months ended September 30, 2024, compared to $10,759,015 for the nine months ended September 30, 2023. Parkit used net cash of $9,841,084 in investing activities for the nine months ended September 30, 2024, compared to $102,043,727 from investing activities for the nine months ended September 30, 2023. Parkit used net cash of $5,699,497 for financing activities for the nine months ended September 30, 2024, compared to net cash received of $76,822,942 for the nine months ended September 30, 2023.
- Net loss for the period. The Company had net loss of $2,119,597 and $2,400,618, for the three and nine months ended September 30, 2024, compared to a net loss of $793,939 and $848,134, for the three and nine months ended September 30, 2023. The net loss was a result of FFO growth less the impact of non-cash items including an unrealized loss on derivative financial instruments of $1,407,304 and $96,678, for the three and nine months ended September 30, 2024 and depreciation of $2,191,960 and $6,505,432, for the three and nine months ended September 30, 2024, compared to depreciation of $2,028,486 and $5,592,203, for the three and nine months ended September 30, 2023.
- Net parking income for the period. Net parking income includes parking properties income and the share of income loss from equity accounted investees. The net parking loss was $157,622 and an income of $163,970 for the three and nine months ended September 30, 2024, compared to income of $365,294 and $2,498,816 for the three and nine months ended September 30, 2023. The current year loss is a result of a one-time loss realized from the joint ventures sale of Z Parking compared to the prior year results which reflects a one-time gain realized from the Company’s sale of Fly Away Nashville. The current results reflect streamlined operations and a growing market in Nashville, TN.
- Acquisitions. In Q3, Parkit continued to consolidate its legacy parking holdings by acquiring its remaining interest in Z Airport Parking, located in East Granby, Connecticut from its joint venture partners. Z Airport Parking is a 5.5 acre off airport parking lot located by the Bradley International Airport, the purchase price was $2.2 million and was satisfied with funds on hand. Parkit now owns 100% of Z Airport Parking.
- Leasing at 40+% rental spreads. During the three months ended September 30, 2024, Parkit continued to renew and sign leases at market rates. Parkit renewed 70,491 square feet of gross leasable area with an 42% increase over in place leases and signed new leases on 35,728 square feet of gross leasable area.
- Continued focus on environmental, social and governance (“ESG”) initiatives. Parkit continued its focus on ESG initiatives by prioritizing environmental initiatives in its development plans and reviewing its corporate policies.
Parkit is focused on growing and maximizing cash flows from its industrial portfolio, while streamlining operations of its parking assets.
Further Information
For comprehensive disclosure of Parkit’s performance for the three and nine months ended September 30, 2024 and its financial position as at such date, please see Parkit’s Condensed Consolidated Interim Financial Statements and Management’s Discussion and Analysis for the three and nine months ended September 30, 2024 filed on SEDAR+ at www.sedarplus.ca.
Non-IFRS Measures
Management uses both IFRS and Non-IFRS Measures to assess the financial and operating performance of the Company’s operations. These Non-IFRS Measures are not recognized measures under IFRS, do not have a standardized meaning under IFRS and are unlikely to be comparable to similar measures presented by other companies. The Non-IFRS Measures referenced in this news release include the following:
Funds from Operations (“FFO”) is a Non-IFRS Measure of operating performance as it focuses on cash flow from operating activities. REALPAC is the national industry association dedicated to advancing the long-term vitality of Canada’s real property sector. REALPAC defines FFO as net income (calculated in accordance with IFRS), adjusted for, among other things, depreciation, transaction costs, gains and losses from property dispositions, foreign exchange, as well as other non-cash items. The Company believes that FFO can be a beneficial measure, when combined with primary IFRS measures, to assist in the evaluation of the Company’s ability to generate cash and evaluate its return on investments as it excludes the effects of real estate amortization and gains and losses from the sale of real estate, all of which are based on historical cost accounting and which may be of limited significance in evaluating current performance.
FFO should not be viewed as an alternative to, in isolation from, or superior to, net income or cash flow from operations, or results from Parkit’s comprehensive operations, or other measures calculated in accordance with IFRS. FFO should not be interpreted as an indicator of cash generated from operating activities and is not indicative of cash available to fund operating expenditures, or for the payment of cash distributions. FFO is simply an additional measure of operating performance which highlight trends in Parkit’s core business that may not otherwise be apparent when relying solely on IFRS financial measures. Parkit’s management also uses this Non-IFRS Measure in order to facilitate operating performance comparisons from period to period and to prepare operating budgets. In addition, while Parkit’s methods of calculating FFO comply with REALPAC recommendations, FFO may differ from and not be comparable to FFO used by other companies.
The following table indicates how Parkit reconciles FFO to the nearest IFRS measure.
| Three months ended September 30, 2024 | Three months ended September 30, 2023 | Nine months ended September 30, 2024 | Nine months ended September 30, 2023 | |
| Net (loss) income and comprehensive (loss) income | $(2,119,597) | $(793,939) | $(2,400,618) | $(848,470) |
| Add / (Deduct): | ||||
| Share of (income) loss from equity-accounted investees | 406,557 | (59,951) | 485,361 | (1,968,995) |
| Depreciation | 2,191,960 | 2,028,486 | 6,505,432 | 5,592,203 |
| Unrealized loss on derivative financial instruments | 1,407,304 | – | 96,678 | – |
| Foreign exchange | (47,180) | 89,571 | 41,324 | (49,271) |
| Income tax expense | – | – | – | 336 |
| FFO | $1,839,044 | $1,264,167 | $4,728,177 | $2,725,803 |
| FFO per share | $0.01 | $0.01 | $0.02 | $0.01 |
Stabilized comparative properties NOI is a non-IFRS measure used by management in evaluating the performance of properties fully owned by the Company in the current and prior year comparative periods. Stabilized comparative properties NOI enables investors to evaluate our operating performance, especially to assess the effectiveness of our management of properties generating NOI growth from existing properties. This non-GAAP financial measure is not defined by IFRS Accounting Standards, does not have a standard meaning and may not be comparable with similar measures presented by other issuers.
When comparing the Stabilized comparative properties NOI on a year-over-year basis for the three and nine months, the Company excludes investment properties acquired on or after the beginning of the prior year period. For the three and nine months ended September 30, 2024 and September 30, 2023, the Company excludes investment properties acquired on or after January 1, 2023. The Stabilized comparative properties NOI is calculated by taking NOI and excluding the impact of NOI from acquisitions, NOI from straight-line rent and NOI from unstabilized properties. The Company reconciles the Stabilized comparative properties NOI to net rental income.
The following tables indicates how Parkit reconciles NRI to Stabilized comparative properties NOI.
| Three months ended September 30, 2024 | Three months ended September 30, 2023 | Change in $ | Change in % | |
| Stabilized comparative properties NOI | $2,587,090 | $2,233,930 | $353,160 | 16% |
| NOI from newly acquired properties | 1,826,315 | 1,683,579 | 142,736 | |
| Straight line rent | 189,700 | 255,669 | (65,969) | |
| NOI from unstabilized properties | (63,518) | (346,563) | 283,045 | |
| Net rental income | $4,539,587 | $3,826,615 | $712,972 | 19% |
| Nine months ended September 30, 2024 | Nine months ended September 30, 2023 | Change in $ | Change in % | |
| Stabilized comparative properties NOI | $7,650,463 | $6,439,552 | $1,210,911 | 19% |
| NOI from newly acquired properties | 4,925,615 | 3,467,101 | 1,458,514 | |
| Straight line rent | 557,180 | 471,492 | 85,688 | |
| NOI from unstabilized properties | (306,490) | (910,013) | 603,523 | |
| Net rental income | $12,826,768 | $9,468,132 | $3,358,636 | 35% |
About Parkit Enterprise Inc.
Parkit Enterprise is an industrial real estate platform focused on the acquisition, growth and management of strategically located industrial properties across key urban markets in Canada. In addition, Parkit has parking assets across various markets in the United States of America. Parkit’s Common Shares are listed on TSX-V (Symbol: PKT).
For more information, please contact Mr. Carey Chow, Mr. Iqbal Khan or Mr. Steven Scott:
Investor Relations
Contact Number: 1-888-627-9881
Email: ir@parkitenterprise.com
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Information: This news release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, included herein are forward-looking information. In particular, this news release contains forward-looking information in relation to: Parkit continuing to be disciplined on acquisitions, and Parkit’s expectations to increase revenue, NRI and FFO for 2024; Parkit’s continued focus on ESG initiatives by prioritizing environmental investments; Parkit’s focus on growing and maximizing cash flows on its industrial portfolio, while streamlining operations of its parking properties; and Parkit’s focus on the acquisition, growth and management of strategically located industrial properties across key urban markets in Canada. This forward-looking information reflects Parkit’s current beliefs and is based on information currently available to Parkit and on assumptions Parkit believes are reasonable. These assumptions include, but are not limited to: the level of activity in the industrial real estate business and the economy generally; continued consumer interest in Parkit’s services and products; Parkit’s continued ability to acquire properties that are in-line with its strategic focus, including prioritizing environmental investments; Parkit’s continuing ability to grow its portfolio of investment properties; and Parkit’s past results continuing to be an indicator of future results. Forward-looking information is subject to known and unknown risks and uncertainties that may cause the actual results, performance or developments to differ materially from those contained in or implied by such forward-looking information. These risks, uncertainties, and factors may include, but are not limited to: general business, economic, competitive, political and social uncertainties; general capital market conditions and market prices for securities; delay or failure to receive board of directors, third party or regulatory approvals; the actual results of Parkit’s future operations; competition; changes in legislation, including environmental legislation, affecting Parkit; the timing and availability of external financing on acceptable terms; conclusions of economic evaluations and appraisals; and the lack of qualified, skilled labour or loss of key individuals. A description of additional risk factors that may cause actual results to differ materially from forward-looking information can be found in Parkit’s disclosure documents on the SEDAR+ website at www.sedarplus.ca. Although Parkit has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. Readers are cautioned that the foregoing list of risks, uncertainties and factors is not exhaustive. Accordingly, readers should not place undue reliance on forward-looking information. Readers are further cautioned not to place undue reliance on forward-looking information as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking information contained in this news release is expressly qualified by this cautionary statement. The forward-looking information contained in this news release represents the expectations of Parkit as of the date of this news release and, accordingly, is subject to change after such date. However, Parkit expressly disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities law.
The expectations to continue to be disciplined on acquisitions and to increase Parkit’s revenue, NRI and FFO for 2024 contained in this news release may be considered a financial outlook as defined by applicable securities legislation. Such information and any other financial outlooks contained in this news release have been approved by management of Parkit as of the date hereof. Such financial outlooks are provided for the purpose of presenting information about management’s current expectations and goals relating to the future business of Parkit. Readers are cautioned that reliance on such information may not be appropriate for other purposes.