- RioCan REIT (TSX:REI.UN) has reported a three per cent growth net operating income from its properties in 2020’s first quarter
- Despite the improvement, the company has withdrawn its growth guidance for 2020, due to the ongoing COVID-19 pandemic
- However, RioCan’s net income dipped almost 50 per cent in the quarter to C$102.8 million, compared to 2019’s same period
- RioCan attributed the income drop to higher fair value gains on its properties in 2019, rather than the pandemic
- RioCan REIT (REI.UN) is up 1.4 per cent, with shares trading for $15.26 and a market cap of $4.85 billion
RioCan REIT (TSX:REI.UN) has reported a three per cent growth in net operating income from its properties in 2020’s first quarter.
Even with improving figures, the company has withdrawn its growth guidance for 2020. This is due to the ongoing COVID-19 pandemic, which the company can not yet estimate the full impact of.
While RioCan’s growth improved, its net income dipped significantly in the quarter to C$102.8 million. This is almost a 50 per cent drop on 2019’s net income.
However, RioCan attributed the discrepancy to higher fair value gains on its properties in 2019, rather than the pandemic.
The company’s construction operations in Canada remain largely ongoing. However, due to various provincial isolation and quarantine measures, progress at the construction sites has been slower than anticipated.
Due to these impacts, the company has halted any new projects until further notice. By doing this, RioCan expects this to save between $100 million to $150 million in its previously planned 2020 budget.
RioCan’s CEO, Edward Sonshine, is very pleased with the company’s steady growth in the midst of a worldwide pandemic.
“The strength of our results this quarter is an indication of this portfolio’s growth prospect in the normal course.
“At the outbreak of the COVID-19 pandemic, with pre-planning and forethought, we were able to rapidly mobilise our pre-established crisis management team, execute on our business continuity plan, and seamlessly adapt to working and staying connected remotely, while maintaining our commitment to providing access to essential services in a safe and responsible way,” he said.
Edward added that he is proud of Riocan’s team during this challenging period and remains confident about the company’s future growth.
RioCan REIT (REI.UN) is up 1.4 per cent, with shares trading for $15.26 at 10:26am EDT.
