Morguard North American Residential REIT (MRG-UN) Q2 2024 earnings summary

Executive summary

• Total assets reached CAD 4.4 billion at Q2 2024, up from CAD 4.1 billion at year-end 2023, driven by fair value gains, FX, and higher cash balances.

• Net income for Q2 2024 was CAD 50.6 million, down 42.2% from Q2 2023, mainly due to lower fair value gains on properties.

• IFRS net operating income (NOI) increased 2.2% year-over-year to CAD 54.6 million, aided by foreign exchange gains.

• Basic funds from operations (FFO) for Q2 2024 was CAD 22.7 million (CAD 0.41 per unit), down 4.3% year-over-year.

Financial highlights

• Revenue from real estate properties for Q2 2024 was CAD 85.8 million, up from CAD 83.3 million in Q2 2023.

• Cash on hand at quarter-end was CAD 127.8 million, with an additional CAD 100 million available under a revolving credit facility.

• Long-term debt obligations totaled CAD 1.6 billion, with a weighted average interest rate of 3.87% and term to maturity of 5.4 years.

• Debt to gross book value ratio rose to 39.3% from 38.7% at year-end 2023.

• FFO payout ratio increased to 44.6% from 42.5% year-over-year.

Outlook and guidance

• Management expects U.S. occupancies to stabilize through the summer and maintain higher levels through winter using management software.

• No specific guidance on timing of capital deployment for acquisitions, but active in both U.S. and Canadian markets.

• Portfolio occupancy in Canada remains strong at 98.0%, with average monthly rent up 6.1% year-over-year.

• U.S. average monthly rent increased 2.6% year-over-year, but occupancy declined to 93.3%.