TORONTO, Feb. 22, 2024 (GLOBE NEWSWIRE) — STORAGEVAULT CANADA INC. (“StorageVault” or the “Corporation“) (SVI-TSX) reports the Corporation’s full year 2023 audited results. Iqbal Khan, Chief Financial Officer, commented:
“Our team continued to deliver solid growth in 2023, achieving same store NOI growth of 4.5% and AFFO per share growth of 7.6% – these results are after achieving a cumulative 32.7% same store NOI growth and AFFO growth of 74.2% over the past two years. For 2024, we expect to continue to achieve our long term same store NOI growth, to complete $70 to $100 million of acquisitions, to complete 50,000 square feet of expansion and renovations, and to continue to increase our cash flow through revenue management and cost control.”
2023 Full Year Audited Results
Revenue increased to $288.7 million in 2023 from $261.8 million in 2022 and net operating income (“NOI”), a non-IFRS measure, grew to $193.6 million in 2023 from $176.0 million in 2022. Cash flow from operations grew to $85.8 million in 2023 from $76.4 million in 2022 and when combined with our financing, acquisitions, expansions, and $21.6 million in share repurchase resulted in a cash balance of $13.9 million at the end of the year. The net loss of $1.7 million or $0.01 loss per common share for the year (net loss of $41.2 million or $0.11 loss per common share for 2022) is a result of the following non-cash and non-recurring items – $100.5 million in depreciation and amortization, $4.0 million realized gain on derivative financial instruments, $3.8 million in stock based compensation, $4.2 million interest accretion on convertible debentures, $1.5 million of unrealized loss on derivative financial instruments, a $15.5 million gain on real estate disposition from an expropriation and deferred tax recovery of $8.6 million.
Revenue and NOI growth from existing self storage, a non-IFRS measure, increased by 4.8% and 4.5%, over the prior year. Funds from operations (“FFO“), a non-IFRS measure, were $80.1 million in 2023 compared to $70.6 million for 2022, a 13.5% increase year over year. Adjusted funds from operations (“AFFO“), a non-IFRS measure, were $86.0 million for 2023 compared to $80.2 million for 2022, a 7.3% increase year over year. On a per share basis, FFO and AFFO, non-IFRS ratios, increased by 13.8% and 7.6%, respectively.
Annualizing results from our 2023 acquisitions would have resulted in revenues of $294.3 million, NOI of $197.6 million, FFO of $83.8 million and AFFO of $89.7 million. See definition of “Annualized Information” below.
For further information on non-IFRS measures and for a reconciliation of the above NOI, FFO, AFFO and Existing Self Storage amounts to the most directly comparable IFRS measure, please see “Non-IFRS Financial Measures” below and the Corporation’s Management’s Discussion & Analysis for the fiscal year ended December 31, 2023 filed on SEDAR+ at www.sedarplus.ca.
2023 Fourth Quarter Results
Revenue for the fourth quarter of 2023 increased to $74.3 million compared to $69.1 million in Q4 2022 and net operating income (“NOI”), a non-IFRS measure, grew to $49.9 million from $46.0 million for the comparative period. Our cash flow from operations increased year over year and when combined with our financing, acquisitions and expansions resulted in a cash balance of $13.9 million at the end of the quarter. The Q4 2023 net loss of $27.8 million (net loss of $23.3 million for Q4 2022) is impacted by the following non-cash and non-recurring items – $25.3 million of depreciation and amortization, $18.5 million of unrealized loss on derivative financial instruments, $2.9 million in stock based compensation, $4.2 million interest accretion on convertible debentures and deferred tax recovery of $2.3 million.
Revenue and NOI from Existing Self Storage stores increased by 5.1% and 5.1%, compared to the same period last year. Funds from operations (“FFO”), a non-IFRS measure, were $20.9 million for Q4 2023 compared to $17.6 million in Q4 2022, an 18.7% increase year over year. Adjusted funds from operations (“AFFO”), a non-IFRS measure, were $22.8 million for Q4 2023 compared to $19.2 million in Q4 2022, an 18.6% increase. On a per basic common share basis, FFO and AFFO increased by 19.7% and 19.6%, respectively.
For a reconciliation of the above NOI, FFO, and AFFO amounts to IFRS, please see “Non-IFRS Financial Measures” and the reconciliation tables below, and the Corporation’s Management’s Discussion & Analysis for the year ended December 31, 2023 filed on SEDAR+ at www.sedarplus.ca.
Increased Dividend
StorageVault is increasing its quarterly dividend by 0.5% beginning Q1 2024 to $0.002888 per common share.
Our Strategy
StorageVault is focused on owning and operating storage in the top markets in Canada. Our goal is to have multiple stores in each market, with complementary portable storage units and records management storage services, to take advantage of economies of scale. Our growth strategy is focused on acquisitions, organic growth, expansion of our existing stores and expansion of our portable storage and records management businesses.
Further Information
For comprehensive disclosure of StorageVault’s performance for the year ended December 31, 2023 and its financial position as at such date, please see StorageVault’s Consolidated Financial Statements, Management’s Discussion and Analysis and Annual Information Form for the year ended December 31, 2023 filed filed on SEDAR+ at www.sedarplus.ca.
Non-IFRS Financial Measures
Management uses both IFRS and non-IFRS Measures to assess the financial and operating performance of the Corporation’s operations. These non-IFRS Measures are not recognized measures under IFRS, do not have a standardized meaning under IFRS and are unlikely to be comparable to similar measures presented by other companies. The non-IFRS Measures referenced in this news release include the following:
Net Operating Income (“NOI“) – NOI is defined as storage and related services revenue less related property operating costs. NOI does not include interest expense or income, depreciation and amortization, corporate administrative costs, stock based compensation costs or taxes. NOI assists management in assessing profitability and valuation from principal business activities.
Funds from Operations (“FFO“) – FFO is defined as net income (loss) excluding gains or losses from the sale of depreciable real estate, plus depreciation and amortization, realized gains or losses on real estate, realized and unrealized gains or losses on interest rate swaps, interest accretion on convertible debentures, realized and unrealized gains or losses on derivative financial instruments, stock based compensation expenses and deferred income taxes; and after adjustments for equity accounted entities and non-controlling interests. FFO should not be viewed as an alternative to cash from operating activities, net income, or other measures calculated in accordance with IFRS. The Corporation believes that FFO can be a beneficial measure, when combined with primary IFRS measures, to assist in the evaluation of the Corporation’s ability to generate cash and evaluate its return on investments as it excludes the effects of real estate amortization and gains and losses from the sale of real estate, all of which are based on historical cost accounting and which may be of limited significance in evaluating current performance.
Adjusted Funds from Operations (“AFFO“) – AFFO is defined as FFO plus acquisition and integration costs. Acquisition and integration costs are one time in nature to the specific assets purchased in the current period or pending and are expensed under IFRS.
Existing Self Storage – means stabilized stores that StorageVault has owned or leased at least since the beginning of the previous fiscal year.
NOI, FFO, AFFO and Existing Self Storage, should not be viewed as an alternative to, in isolation from, or superior to, net income or cash flow from operations, or results from StorageVault’s comprehensive operations, respectively, or other measures calculated in accordance with IFRS. NOI, FFO and AFFO should not be interpreted as an indicator of cash generated from operating activities and is not indicative of cash available to fund operating expenditures, or for the payment of cash distributions. Existing Self Storage should not be considered a measure of StorageVault’s comprehensive operations. NOI, FFO, AFFO and Existing Self Storage are simply additional measures of operating performance which highlight trends in StorageVault’s core business that may not otherwise be apparent when relying solely on IFRS financial measures. StorageVault’s management also uses these non-IFRS measures in order to facilitate operating performance comparisons from period to period and to prepare operating budgets. In addition, the Corporation’s definitions of NOI, FFO, AFFO and Existing Self Storage may differ from that of other issuers.
Non-IFRS Financial Measures Reconciliation
The following table reconciles Net Income (Loss) and Net Operating Income:
(unaudited)
(audited)
Three Months Ended December 31
Fiscal
Change
Change
2023
2022
$
%
2023
2022
$
%
Storage revenue and related services
$
73,750,304
$
68,605,992
$
5,144,312
7.5
%
$
286,687,556
$
259,933,061
$
26,754,495
10.3
%
Management fees
518,609
483,861
34,748
7.2
%
2,037,056
1,895,228
141,828
7.5
%
74,268,913
69,089,853
5,179,060
7.5
%
288,724,612
261,828,289
26,896,323
10.3
%
Operating costs
24,336,840
23,068,991
1,267,849
5.5
%
95,131,868
85,794,347
9,337,521
10.9
%
Net operating income 1
49,932,073
46,020,862
3,911,211
8.5
%
193,592,744
176,033,942
17,558,802
10.0
%
Less:
Acquisition and integration costs
1,959,784
1,666,565
293,219
17.6
%
5,904,217
9,587,840
(3,683,623
)
-38.4
%
Selling, general and administrative
6,300,966
5,461,630
839,336
15.4
%
24,290,628
21,048,950
3,241,678
15.4
%
Interest
20,809,179
21,321,051
(511,872
)
-2.4
%
83,297,441
74,801,847
8,495,594
11.4
%
Stock based compensation
2,944,323
12,587,262
(9,642,939
)
-76.6
%
3,795,626
13,631,028
(9,835,402
)
-72.2
%
Realized (gain) loss on real estate
87,689
–
87,689
–
(15,528,115
)
–
(15,528,115
)
–
Realized (gain) loss on derivative financial instruments
(23,454
)
–
(23,454
)
–
(3,994,356
)
–
(3,994,356
)
–
Unrealized (gain) loss on derivative financial instruments
18,458,800
(422,566
)
18,881,366
-4468.3
%
1,450,089
3,664,312
(2,214,223
)
-60.4
%
Interest accretion on convertible debentures
4,195,644
–
4,195,644
–
4,195,644
–
4,195,644
–
Depreciation and amortization
25,278,530
34,124,962
(8,846,432
)
-25.9
%
100,518,182
104,126,661
(3,608,479
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