CHC Student Housing Announces Results for the Three Months Ended March 31, 2020

Toronto, Ontario--(Newsfile Corp. - June 19, 2020) - CHC Student Housing Corp. (TSXV: CHC.H) ("CHC" or the "Company") announced today results for the three months ended March 31, 2020. The unaudited Condensed Consolidated Interim Financial Statements and related Management's Discussion and Analysis ("MD&A") for the three months ended March 31, 2020, are available under CHC's profile on SEDAR at www.sedar.com.

Highlights during the three months ended March 31, 2020:

  • Net Operating Income ("NOI") was lower by 87.7% at $84,736. This was due to the sale of the London Property on February 5, 2020. The London Property was the last remaining property owned by the Company. At March 31, 2019, the Company owned two properties, the Trois - Rivières and London Properties.
  • Net loss of $671,573 was higher by $163,198 mainly due to lower NOI, as result of the sale of the Trois- Rivières Property on December 18, 2019 and the sale of the London Property on February 5, 2020. Also, the Company incurred a loss on the sale of the London Property of $375,161.
  • The sale of the London Property generated proceeds of $6,483,651 after the discharge of the mortgages.

As previously disclosed, the Company generated sufficient funds from the sale of the London Property to settle its current debts, seek out alternative business opportunities which could potentially result in additional value for shareholders and provide a return of capital to its shareholders in an amount to be determined.

Summary of Selected Financial and Operational Information

The selected financial information below is based on and derived from the condensed consolidated interim financial statements for the three months ended March 31. 2020.

Statement of comprehensive loss
Three Months Ended
March 31



2020
2019
       
Property revenues

$328,694
$1,118,369
Property operating expenses

(243,958)
(431,478)
Net Operating Income (NOI)

$84,736
$686,891
       
Depreciation

(7,251)
(11,938)
General & administrative expense

(131,885)
(265,887)
Reversal of liabilities

507,977
-
Fair value adjustment of equity-based compensation

(7,009)
(8,000)
Fair value adjustment on mortgage payable

-
(207,057)
Loss on sale of investment property

(375,161)
-
Interest

(742,980
(702,384)
Net Loss

($671,573)
($508,375)
Net loss per share - basic and diluted

($0.25)
($0.19)
Funds From Operations (FFO) (1)

($804,389)
($301,318)
FFO per share

($0.30)
($0.11)
Adjusted Funds From Operations (AFFO) (1)

($717,604)
($269,440)
AFFO per share

($0.26)
($0.10)
Weight average shares outstanding

2,716,465
2,716,465

 
(1) FFO and AFFO are non-IFRS performance measures. Please refer to definition in section Non-IFRS Performance Measures on page 3 of the MD&A as well as the reconciliation from net income(loss) and comprehensive income(loss) below.

Revenues decreased by 70.6% or $789,675 year over year, primarily due to the sale of both the Trois - Rivières and London Properties on December 18, 2019 and February 5, 2020, respectively. General and administrative expenses decreased by 50.4% or $134,002 mainly due to lower wages and benefits as a result of lower staffing levels and an adjustment to the board of directors' compensation in January 2020 following the resignation of a board member.

FFO & AFFO Reconciliation

The following table reconciles FFO and AFFO to IFRS net income (loss) and comprehensive income (loss):

Reconciliation from Net Loss to FFO & AFFO
Three Months Ended
March 31



2020
2019
       
Net Loss

(671,573)
($508,375)
Add (subtract):





Reversal of liabilities

(507,977)
-
Loss on sale of investment property

375,161
-
Fair value adjustment on mortgage payable

-
207,057
Funds From Operations (FFO)

($804,389)
($301,318)
Add (subtract):





Fair value adjustment of equity-based compensation (1)

7,009
8,000
Amortization of financing transaction costs

55,012
21,534
Straight line rent

24,764
2,344
Adjusted Funds From Operations (AFFO)

($717,604)
($269,440)

 
(1). The three months ended March 31, 2020 adjustment for stock-based compensation/(recovery) relates to the mark-to-market adjustment of the deferred share unit plan (DSU) granted on September 13, 2016 and October 12, 2017.
.
.

FFO for the three months ended March 31, 2020, and 2019 amounted to ($804,389) or ($0.30) per share and ($301,318) or ($0.11) per share, respectively. AFFO for the three months ended March 31, 2020, and 2019 was ($717,604) or ($0.26) per share and ($269,440) or ($0.10) per share, respectively.

The following table reconciles IFRS cash used in operating activities to AFFO:

Reconciliation from cash used in operating activity to AFFO
Three Months Ended
March 31



2020
2019
       
Cash used in operating activities

($4,502,635)
($108,933)
Add (subtract):





Net changes in working capital

2,865,135
(49,186)
Depreciation

(7,251)
(11,938)
Interest expense on mortgages payable

(687,968)
(680,850)
Cash interest paid

1,615,115
581,467
Adjusted Funds From Operations

($717,604)
($269,440)

 

Financial Position

The Company had cash on hand of $2,259,760 as at March 31, 2020, an increase of $1,978,444 from December 31, 2019 following the sale of the London Property. Total assets at March 31, 2020, were $ 2,315,194 compared to $55,619,225 at December 31, 2019 a decrease of $53,304,031. This decrease was due to the sale of the London Property.

About CHC Student Housing Corp.

CHC Student Housing (TSXV: CHC.H) was previously Canada's only publicly traded company that invested in multi-residential student housing properties.

Following the sale of the Company's London Property on February 5, 2020, the Company ceased to have active operations and no longer met the continued listing requirements for the TSX Venture Exchange ("TSXV"). Therefore, effective February 10, 2020, the Company's listing was transferred from the TSXV to the NEX. The NEX is a separate board of the TSXV that provides a trading forum for listed companies that have fallen below the TSXV's continued listing requirements.

The trading symbol for the Company was changed from CHC to CHC.H. There was no change in the Company's name, no change in its CUSIP number and no consolidation of capital. The symbol extension differentiates NEX symbols from Tier 1 or Tier 2 symbols within the TSX Venture market. The Company is classified as a 'Real Estate' company.

As previously disclosed, the Company generated sufficient funds from the sale of the London Property to settle its current debts, seek out alternative business opportunities which could potentially result in additional value for shareholders and provide a return of capital to its shareholders in an amount to be determined.

Non-IFRS Performance Measures

The Company's consolidated financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS"). The following measures: net operating income (or "NOI"), funds from operations (or "FFO"), FFO per share, adjusted funds from operations (or "AFFO") and AFFO per share, are not measures recognized under IFRS and do not have standardized meanings prescribed by IFRS, and should not be compared to or construed as alternatives to profit/loss, cash flow from operating activities or other measures of financial performance determined in accordance with IFRS. However, these non-IFRS measures are recognized supplemental measures of performance for real estate issuers widely used by the real estate industry, particularly by those publicly traded entities that own and operate income-producing properties, and the Company believes they provide useful supplemental information to both management and readers in measuring the financial performance of the Company. Further details on non-IFRS measures are set out in the Company's Management's Discussion and Analysis for the three months ended March 31, 2020 and the year ended December 31, 2019 and are available on the Company's profile on SEDAR at www.sedar.com.

Forward Looking Information

This press release contains forward-looking information within the meaning of Canadian securities laws. Forward-looking information is provided for the purposes of assisting the reader in understanding the Company's financial performance, financial position and cash flows as at and for the periods ended on certain dates and to present information about management's current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. Such information includes, without limitation, information regarding CHC settling its debts, seeking out alternative business opportunities and providing a return of capital to its shareholders. Although CHC believes that such information is reasonable, it can give no assurance that such expectations will prove to be correct. Forward looking information is typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to future events. CHC cautions investors that any forward-looking information provided by CHC is not a guarantee of future results or performance, and that actual results may differ materially from those in forward looking information as a result of various factors. A variety of factors, many of which are beyond CHC's control, affect the operations, performance and results of the Company and its business, and could cause actual results to differ materially from current expectations of estimated or anticipated events or results. These factors include, but are not limited to, the risks discussed in CHC's materials filed with Canadian securities regulatory authorities from time to time, copies of which may be accessed through CHC's profile on SEDAR at www.sedar.com. The reader is cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking information, as there can be no assurance that actual results will be consistent with such forward-looking information

The forward-looking information included in this press release relate only to events or information as of the date hereof. Except as specifically required by applicable Canadian law, CHC undertakes no obligation to update or revise publicly any forward-looking information, whether because of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy any securities nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Neither the TSX Venture Exchange ("TSXV") nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

For further information please contact:
CHC Student Housing Corp.
Simon Nyilassy
President and CEO
(416) 504-9380

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/58206

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