Market Overview

Fourth Quarter and Full Year 2019 Earnings Report

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MEXICO CITY, Feb. 27, 2020 (GLOBE NEWSWIRE) -- Terrafina® ("TERRA" or "the Company") (BMV:TERRA), a leading Mexican industrial real estate investment trust ("FIBRA"), externally advised by PGIM Real Estate and dedicated to the acquisition, development, leasing and management of industrial real estate properties in Mexico, announced today its fourth quarter 2019 (4Q19) and full year 2019 (FY2019) earnings results.

The figures in this report have been prepared in accordance with International Financial Report Standards ("IFRS"). Figures presented in this report are presented in millions of Mexican pesos and millions of U.S. dollars, unless stated otherwise. Additionally, figures may vary due to rounding.

Terrafina's financial statements that are included in this report are internal and have not yet been audited by the external auditors, nor have they been approved at the Ordinary Shareholders' Meeting. As a result, the mentioned figures in this financial report are preliminary figures and could be adjusted in the future. Once the audited 2019 financial statements are available and have been approved by the Annual Ordinary Shareholders' Meeting, these will be made available to the market as per applicable law.

This document may include forward-looking statements that may imply risks and uncertainties. Terms such as "estimate", "project", "plan", "believe", "expect", "anticipate", "intend", and other similar expressions could be construed as previsions or estimates. Terrafina warns readers that declarations and estimates mentioned in this document, or realized by Terrafina's management imply risks and uncertainties that could change as a result of various factors that are out of Terrafina's control. Future expectations reflect Terrafina's judgment at the date of this document. Terrafina reserves the right or obligation to update the information contained in this document or derived from this document. Past or present performance is not an indicator of future results.

Operating and Financial Highlights as of December 31, 2019

Operating

  • Terrafina closed with a 100% renewal rate in the fourth quarter of 2019.
     
  • As of December 31, 2019, the occupancy rate was 96.5%, a 117 basis point increase compared to the fourth quarter of 2018 (4Q18).
     
  • Annualized average leasing rate per square foot at the year-end was US$5.19, a 1.0% or US$0.04 increase compared to 4Q18.
     
  • At the end of 2019, Terrafina reported a total of 42.3 million square feet (msf) of Gross Leasable Area (GLA) comprised of 289 properties and 296 tenants.
     
  • 2019 leasing activity reached a new record-high that totaled 10.9 msf, of which 23.3% corresponded to new leases, 38.2% to lease renewals and 38.5% to early renewals. Leasing activity was concentrated in the Chihuahua, Ciudad Juarez, Ramos Arizpe, San Luis Potosi, Aguascalientes, Villahermosa, Cuautitlan Izcalli, Monterrey, Puebla, Queretaro, Guadalajara, Silao, Irapuato, Saltillo, Tijuana, Toluca, Reynosa, Arteaga, Celaya, Apodaca, Huehuetoca, Hermosillo and Camargo markets.

Financial

  • FY2019 rental revenues reached US$191.1 million, of which US$48.3 million were generated during 4Q19, a 0.7% or US$40.3 million increase compared to 4Q18.
     
  • FY2019 NOI was US$190.2 million, of which US$48.0 million was generated during 4Q19, the same result compared with 4Q18.
     
  • The NOI margin reached 92.4% in FY2019 and 94.1% in 4Q19, a 78 basis point increase compared to 4Q18.
     
  • FY2019 EBITDA reached US$169.9 million, of which US$42.5 million was generated in 4Q19, a decrease of 0.5% or US$0.2 million compared to 4Q18.
     
  • The EBITDA margin for FY2019 was 82.5% and 83.4% for 4Q19, a 28 basis point increase compared to 4Q18.
     
  • FY2019 adjusted funds for operations (AFFO) reached US$103.6 million, of which US$25.8 million was generated in 4Q19, a decrease of 24.0% or US$0.5 million compared to 4Q18.
     
  • The AFFO margin was 49.8% for 2019 and 50.1% in 4Q19, a 74 basis point decrease compared to 4Q18.
     
  • Total distribution for FY2019 were US$103.6 million; distributions per CBFI were US$0.1310. Considering the average share price for 2019 of US$1.54 (Ps.29.65), Terrafina's dividend yield for the year was 8.5%.
     
  • 4Q19 distributions totaled US$25.8 million. As a result, Terrafina will distribute Ps.0.6316 per CBFI (US$0.0328 per CBFI) for the October 1 to December 31, 2019 period; considering the average share price of US$1.63 for 4Q19 (Ps.31.52), Terrafina's dividend yield for the quarter was 8.0%.

About Terrafina Terrafina (BMV:TERRA) is a Mexican real estate investment trust formed primarily to acquire, develop, lease and manage industrial real estate properties in Mexico. Terrafina's portfolio consists of attractive, strategically located warehouses and other light manufacturing properties throughout the Central, Bajio and Northern regions of Mexico. It is internally managed by highly-qualified industry specialists and externally advised by PGIM Real Estate.

Terrafina owns 300 real estate properties, including 289 developed industrial facilities with a collective GLA of approximately 42.3 million square feet and 11 land reserve parcels, designed to preserve the organic growth capability of the portfolio.

Terrafina's objective is to provide attractive risk-adjusted returns for the holders of its certificates through stable distributions and capital appreciations. Terrafina aims to achieve this objective through a successful performance of its industrial real estate and complementary properties, strategic acquisitions, access to a high level of institutional support, and to its management and corporate governance structure. For more information, please visit www.terrafina.mx

About PGIM Real Estate
PGIM, the global investment management business of Prudential Financial, Inc. (NYSE:PRU), is one of the largest real estate investment managers in the world, with more than $US175.9 billion1 in gross real estate assets under management and administration, as of 30 September 2019. Through its PGIM Real Estate and PGIM Real Estate Finance businesses, PGIM leverages a 140-year history of real estate lending on behalf of institutional and middle-market borrowers2, a 49-year legacy of investing in commercial real estate on behalf of institutional investors, and the deep local knowledge and expertise of professionals in 31 cities around the world.

PGIM Real Estate, the real estate investment management business of PGIM, has been redefining the real estate investing landscape since 1970. Combining insights into macroeconomic trends and global real estate markets with excellence of execution and risk management, PGIM Real Estate's tenured team offers to its global clients a broad range of real estate equity, debt, and securities investment strategies that span the risk-return spectrum and geographies. For more information, visit pgimrealestate.com.

(1) AUA equals $US36.0 billion.
(2) Includes legacy lending through PGIM's parent company, Prudential Financial, Inc.

About Prudential Financial, Inc.
Prudential Financial, Inc. (NYSE:PRU), a financial services leader with more than US$1.6 trillion of assets under management as of December 31, 2019, has operations in the United States, Asia, Europe, and Latin America. Prudential's diverse and talented employees are committed to helping individual and institutional customers grow and protect their wealth through a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds and investment management. In the U.S., Prudential's iconic Rock symbol has stood for strength, stability, expertise and innovation for more than a century. For more information, please visit www.news.prudential.com

Forward Looking Statements
This document may include forward-looking statements that may imply risks and uncertainties. Terms such as "estimate", "project", "plan", "believe", "expect", "anticipate", "intend", and other similar expressions could be construed as previsions or estimates. Terrafina warns readers that declarations and estimates mentioned in this document, or realized by Terrafina's management imply risks and uncertainties that could change in function of various factors that are out of Terrafina's control. Future expectations reflect Terrafina's judgment at the date of this document. Terrafina reserves the right or obligation to update the information contained in this document or derived from this document. Past or present performance is not an indicator of future results.


Conference Call

Terrafina
(BMV:TERRA)
Cordially invites you to participate in its
Fourth Quarter 2019 Conference Call

Friday, February 28, 2020
11:00 a.m. Eastern Time
10:00 a.m. Central Time

***
To access the call, please dial:
from within the U.S. +1-877-407-8031
from outside the U.S. +1-201-689-8031
from Mexico (toll free) 01-800-522-0034


Audio Webcast Link: https://www.webcaster4.com/Webcast/Page/2133/32818

  To access the conference replay please dial:
U.S. +1-877-481-4010
International (outside the US) +1-919-882-2331
Passcode: 53757

For the full version of this report please visit: www.terrafina.mx under the Investors section or contact:

Francisco Martinez, IRO
Terrafina
Tel: +52 (55) 5279-8107
Correo: francisco.martinez@terrafina.mx

Ana María Ybarra
Miranda IR
Tel: +52 1 (55) 3660-4037
Correo: ana.ybarra@miranda-ir.com

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