Highlights

  • UN’s Q3FY24 property revenue grew by 4.7% YoY to CAD 93.7 million
  • Net operating income of KPM.UN increased by 6.4% YoY, to CAD 64.4 million in Q3FY24
  • Killam expects over 8.0% same-property NOI growth, with 38% from outside Atlantic Canada

Killam Apartment Real Estate Investment Trust (TSX:KMP.UN) is engaged in acquisition, management, and development of multi-residential apartment buildings and manufactured home communities (MHC). The open-ended mutual fund trust has a market cap of CAD 2.15bn.

KPM reported that in the third quarter of financial year 2024 (Q3FY24), property revenue increased by 4.7% YoY, reaching CAD 93.7 million. This growth was driven by the decent overall performance of the company’s portfolio. Net operating income (NOI) also saw a 6.4% YoY rise, reaching CAD 64.4 million. The increase in NOI was chiefly driven by higher revenue and controlled expenditures.

However, income before income taxes decreased by 4.5%YoY to CAD 74.0 million, compared to CAD 77.5 million in Q3FY23. This decline was mainly due to higher finance costs, although it was partially offset by fair value adjustments on investment properties. As a result, the company's net income dropped by 8.2% YoY to CAD 62.7 million, compared to CAD 68.3 million in the previous year.

Recent Business Update

As of November 6, 2024, the company reported a notable reduction in debt, ending Q3 with debt accounting for just 40.7% of total assets, the lowest level in its history. On November 15, 2024, the company also announced a monthly dividend distribution of CAD 0.06 per unit, which was paid to unitholders of record on November 29, 2024, on December 16, 2024.

Company Outlook

The REIT expects to achieve a minimum same-property net operating income  growth of over 8.0% for FY24. Additionally, more than 38% of its NOI is expected to come from regions outside Atlantic Canada.

Top 10 Shareholders

The top 10 shareholders of KPM collectively own around 26.00% of the total shares. BlackRock Institutional Trust Company, N.A. holds the largest stake at approximately 4.72%. RBC Global Asset Management Inc. follows with a stake of about 4.57%.

Stock Information

The stock has declined by approximately 2.11% over the past week and 3.46% over the past month. As of December 16, 2024, the stock closed at CAD 17.55, which is lower than the average of its 52-week high of CAD 21.72 and 52-week low of CAD 16.62.

Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is December 16, 2024. The reference data in this report has been partly sourced from EODHD/Others.