MONTRÉAL, March 22, 2023 (GLOBE NEWSWIRE) -- (TSX-V: NET.UN) Canadian Net Real Estate Investment Trust (“Canadian Net” or the “Trust”) announces its results for the year ended December 31^st, 2022, and monthly distributions for the months of April, May and June 2023.

Jason Parravano, President and CEO says: “It is my pleasure to share with you our 2022 results, which demonstrate another great year of per unit FFO growth. Despite a turbulent year, we managed to complete 10 acquisitions to help propel our results. Going into 2023, we remain diligent as we navigate a more volatile interest rate environment, as well as other macroeconomic headwinds. Our focus is to optimize our existing properties in order to deliver consistent results for our unit holders.”

RESULTS

For the quarter ended December 31^st, 2022, Canadian Net reported funds from operations per unit¹ ("FFO per unit") of $0.162 compared to $0.147 per unit for the quarter ended December 31^st, 2021, an increase of 10%. Funds from Operations¹ (“FFO”) was $3,329,459, an increase of 12% relative to $2,971,560 in Q4 2021.

During Q4 2022, the Trust’s property rental income was $7,052,983 compared to $4,932,753 in Q4 2021, an increase of 43%. Net Operating Income¹ (“NOI”) was $4,878,281 compared to $3,904,277 in Q4 2021, an increase of 25%.

Canadian Net also recorded a loss attributable to unitholders of $9,309,990 compared to a net income of $7,453,246 in Q4 2021.

For the twelve-month period ended December 31^st, 2022, Canadian Net reported FFO per unit¹ of $0.636 compared to $0.581 per unit for the same period in 2021, an increase of 9%. FFO¹ was $13,039,054, an increase of 21% relative to $10,791,751 for the twelve-month period ended December 31^st, 2021.

During the period, the Trust’s property rental income was $24,729,024 compared to $18,953,524 for the same period in 2021, an increase of 30%. NOI¹ was $18,372,314 compared to $14,321,735 for the same period in 2021, an increase of 28%.

Canadian Net also recorded a net loss attributable to unitholders of $6,493,632 compared to net income of $25,090,167 for the same period in 2021.

The FFO¹ increase was primarily due to the impact of the newly acquired properties, partially offset by interest on mortgages associated with said properties and higher interest rates on existing variable-rate mortgages and credit facilities. On the rental income and NOI¹ sides, the increases can be explained by the impact of the newly acquired properties. Finally, the net income variance can be attributed to the impact of NOI¹ from newly acquired properties, partially offset by interest on mortgages associated with said properties, as well as the change in the fair value of investment properties.

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¹ This is a non-IFRS financial measure that does not have any standardized IFRS meaning and as such may not be comparable to other issuers. Refer to section “Non-IFRS Financial Measures”.

DISTRIBUTIONS

Canadian Net announces that it will make monthly cash distributions of $0.02875 per unit, representing $0.345 per unit on an annualized basis, on April 28^th, May 31^st and June 30^th, 2023, to unitholders of record on April 14^th, May 15^th and June 15^th, 2023, respectively.

The tables below represent other financial highlights as well as the reconciliations of certain non-IFRS measures for the periods ended December 31^st, 2022, and its comparative period. This information should be read in conjunction with the Audited Consolidated Financial Statements and MD&A for the quarter ended December 31^st, 2022, and the Audited Consolidated Financial Statements and MD&A for the quarter ended December 31^st, 2021.

SUMMARY OF SELECTED FINANCIAL INFORMATION

	12 months
Periods ended December 31	2022		2021		Δ			%
Financial info
Property rental income	24,729,024		18,953,524		5,775,500			30%
Net income (loss) and
comprehensive income (loss)	(6,493,632)		25,090,167		(31,583,799)			(126%)
NOI (1)	18,372,314		14,321,735		4,050,579			28%
FFO (1)	13,039,054		10,791,751		2,247,303			21%
AFFO (1)	12,152,784		10,033,624		2,119,160			21%
EBITDA (1)	(226,479)		29,653,605		(29,880,084)			(101%)
Adjusted EBITDA (1)	18,693,878		14,946,751		3,747,127			25%
Investment properties	275,425,158		252,947,654		22,477,504			9%
Adjusted investment properties (1)	326,897,963		298,465,593		28,432,370			10%
Total assets	303,059,853		278,165,686		24,894,167			9%
Mortgages	135,680,946		121,549,841		14,131,105			12%
Long-term debt	45,000		60,000		(15,000)			(25%)
Current portion of mortgages and long term-debt	16,516,785		11,796,018		4,720,767			40%
Mortgages on investment properties held for sale	3,498,066		-		3,498,066			n/a
Credit facilities	15,725,362		2,885,000		12,840,362			445%
Total convertible debentures	8,635,474		8,416,510		218,964			3%
Total equity	118,687,767		129,814,467		(11,126,700)			(9%)
Weighted average units o/s - basic	20,514,719		18,575,569		1,939,150			10%
Amounts on a per unit basis
FFO(1)	0.636		0.581		0.055			9%
AFFO(1)	0.592		0.540		0.052			10%
Distributions	0.340		0.300		0.040			13%
(1) This is a non-IFRS financial measure with no standardized IFRS meaning and may not be comparable to other issuers. Refer to the section “Non-IFRS financial measures”.

NON-IFRS FINANCIAL MEASURES

The Trust’s consolidated financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS"). In this press release, as a complement to results provided in accordance with IFRS, the Trust discloses and discusses certain non-IFRS financial measures: FFO, FFO per unit, AFFO, AFFO per unit, NOI, and Adjusted Investment Properties. These non-IFRS measures are not defined by IFRS, do not have a standardized meaning, and may not be comparable with similar measures presented by other issuers. Canadian Net has presented such non-IFRS measures as management of the Trust believes they are relevant measures of Canadian Net's underlying operating performance and debt management. Non-IFRS measures should not be considered as alternatives to net income, cash generated from (utilized in) operating activities, or comparable metrics determined in accordance with IFRS as indicators of the Trust's performance, liquidity, cash flow, and profitability. Information appearing in this news release is a select summary of results. This news release should be read in conjunction with the condensed consolidated financial statements and MD&A for the Trust. Please refer to the "Non IFRS Financial Measures" section in Canadian Net’s management's discussion and analysis for the period ended December 31, 2022, available under Canadian Net's profile on SEDAR at www.sedar.com for a full description of these measures and, where applicable, a reconciliation to the most directly comparable measure calculated in accordance with IFRS. Such explanation is incorporated by reference herein.

In addition, below are the reconciling tables for the non-IFRS measures used in this press release.

Reconciliation of Investment Properties to Adjusted Investment Properties

As at December 31	2022		2021		Δ
Investment Properties
Developed properties	275,425,158		252,947,654		9%
Investment properties held for sale	5,868,069		-		n/a
Joint Venture Ownership(1)
Developed properties	42,886,822		42,374,347		1%
Properties under development	2,717,914		3,143,592		(14%)
Adjusted Investment Properties(2)	326,897,963		298,465,593		10%
(1) Represents Canadian Net’s proportionate share
(2) This is a non-IFRS financial measure with no standardized IFRS meaning and may not be comparable to other issuers. Refer to the section “Non-IFRS financial measures”

Results of Operations

	3 months								12 months
Periods ended December 31	2022		2021		Δ				2022		2021		Δ
Rental Income	7,052,983		4,932,753		2,120,230				24,729,024		18,953,524		5,775,500
Operating costs	(2,174,702)		(1,028,476)		(1,146,226)				(6,356,710)		(4,631,789)		(1,724,921)
Net Operating Income(1)	4,878,281		3,904,277		974,004				18,372,314		14,321,735		4,050,579
Share of net income (loss) from
investments in joint ventures	(1,835,735)		1,100,189		(2,935,924)				(900,504)		2,966,517		(3,867,021)
Increase/(decrease) in fair values
of investment properties	(10,388,173)		3,354,091		(13,742,264)				(16,741,220)		13,356,401		(30,097,621)
Realized gain on disposition of
investment properties	-		57,674		(57,674)				-		57,674		(57,674)
Unit-based compensation	(95,441)		(49)		(95,392)				(602,617)		(308,595)		(294,022)
Administrative expenses	(218,504)		(192,252)		(26,252)				(891,206)		(811,390)		(79,816)
Financial expenses	(1,653,357)		(625,316)		(1,028,041)				(5,733,338)		(4,346,807)		(1,386,531)
Deferred income taxes	2,939		(145,368)		148,307				2,939		(145,368)		148,307
Net income
and comprehensive income	(9,309,990)		7,453,246		(16,763,236)				(6,493,632)		25,090,167		(31,583,799)
FFO(1)	3,329,459		2,971,560		12%				13,039,054		10,791,751		21%
FFO per unit(1)	0.162		0.147		10%				0.636		0.581		9%
Weighted avg. units o/s
Basic	20,592,733		20,193,078		399,655				20,514,719		18,575,569		1,939,150
(1) This is a non-IFRS financial measure with no standardized IFRS meaning and may not be comparable to other issuers. Refer to the section “Non-IFRS financial measures”

Reconciliation Of Net Income to Funds From Operations

	3 months							12 months
Periods ended December 31	2022		2021		Δ			2022		2021		Δ
Net income (loss) attributable
to unitholders	(9,309,990)		7,453,246		(16,763,236)			(6,493,632)		25,090,167		(31,583,799)
Δ in value of investment properties	10,388,173		(3,354,091)		13,742,264			16,741,220		(13,356,401)		30,097,621
Δ in value of investment
properties in joint ventures	2,299,667		(642,015)		2,941,682			2,718,206		(1,258,966)		3,977,172
Unit based compensation	95,441		49		95,392			602,617		308,595		294,022
Δ fair value adjustments on derivative
financial instruments	(148,393)		(564,707)		416,314			(539,069)		(91,487)		(447,582)
Interest on the lease liability	-		7,383		(7,383)			7,483		28,936		(21,453)
Income taxes	4,561		154,868		(150,307)			2,229		154,080		(151,851)
Realized (gain) loss on sale of
investment properties	-		(57,674)		57,674			-		(57,674)		57,674
Realized (gain) loss on sale of investment
properties in joint ventures	-		(25,499)		25,499			-		(25,499)		25,499
FFO(1)	3,329,459		2,971,560		12%			13,039,054		10,791,751		21%
FFO per unit(1)	0.162		0.147		10%			0.636		0.581		9%
Distributions	1,748,368		1,513,944		234,424			6,966,904		5,577,658		1,389,246
Distributions per unit	0.085		0.075		13%			0.340		0.300		13%
FFO per unit(1) - after distributions	0.077		0.072		6%			0.296		0.281		5%
Distributions per unit as a % of
FFO per unit(1)	53%		51%		2%			53%		52%		1%
Weighted avg. units o/s
Basic	20,592,733		20,193,078		399,655			20,514,719		18,575,569		1,939,150
(1) This is a non-IFRS financial measure with no standardized IFRS meaning and may not be comparable to other issuers. Refer to the section “Non-IFRS financial measures”

Adjusted Funds from Operations

	3 months							12 months
Periods ended December 31	2022		2021		Δ			2022		2021		Δ
FFO (1)	3,329,459		2,971,560		357,899			13,039,054		10,791,751		2,247,303
Amortization of finance charges
included in interest expense	-		-		-			-		-		-
Straight-line rent adjustment(2)	(113,612)		(152,640)		39,028			(475,892)		(599,960)		124,068
Maintenance/cap-ex on								-		-		-
existing properties(3)	(241,330)		(19,301)		(222,029)			(410,378)		(158,167)		(252,211)
Leasing costs on existing properties	-		-		-			-		-		-
Debt extinguishment penalties	-		-		-			-		-		-
AFFO(1)	2,974,517		2,799,619		6%			12,152,784		10,033,624		21%
AFFO per unit(1)	0.144		0.139		4%			0.592		0.540		10%
Distributions per unit	0.085		0.075		13%			0.340		0.300		13%
AFFO per unit(1) - after distributions	0.059		0.064		(7%)			0.252		0.240		5%
Distributions per unit(1) as a % of
AFFO per unit(1)	59%		54%		5%			57%		56%		1%
Weighted avg. units o/s
Basic	20,592,733		20,193,078		399,655			20,514,719		18,575,569		1,939,150
(1) This is a non-IFRS financial measure with no standardized IFRS meaning and may not be comparable to other issuers. Refer to the section “Non-IFRS financial measures”
(2) Adjusted for the proportionate share of equity-accounted investments (3) The maintenance/cap-ex on existing properties for 2022 includes a charge of approximately $188,000 for the expansion of a property, which will generate additional income

Reconciliation of Net Income to EBITDA

	3 months							12 months
Periods ended December 31	2022		2021		Δ			2022		2021		Δ
Net income attributable
to unitholders	(9,309,990)		7,453,246		(16,763,236)			(6,493,632)		25,090,167		(31,583,799)
Net interest expense	1,798,956		1,186,697		612,259			6,262,620		4,431,479		1,831,141
Interest on the lease liability	-		(7,383)		7,383			(7,483)		(28,936)		21,453
Income taxes	4,561		154,868		(150,307)			2,229		154,080		(151,851)
Other financial charges	2,794		3,326		(532)			9,787		6,815		2,972
EBITDA(1)	(7,503,679)		8,790,754		(16,294,433)			(226,479)		29,653,605		(29,880,084)
Δ in value of investment properties	10,388,173		(3,354,091)		13,742,264			16,741,220		(13,356,401)		30,097,621
Δ in value of investment
properties in joint ventures	2,299,667		(642,015)		2,941,682			2,718,206		(1,258,966)		3,977,172
Δ in value of convertible debentures	(148,393)		(649,916)		501,523			(465,889)		(377,068)		(88,821)
Δ in value of warrants	-		85,209		(85,209)			(73,180)		285,581		(358,761)
Adjusted EBITDA(1)	5,035,768		4,229,941		19%			18,693,878		14,946,751		25%
Interest expense	1,888,160		1,061,279		826,881			6,582,923		4,393,839		2,189,084
Principal repayments	1,124,398		891,573		232,825			4,374,378		3,315,890		1,058,488
Debt service requirements	3,012,558		1,952,852		54%			10,957,301		7,709,729		42%
Interest coverage ratio based on adjusted EBITDA(1)	2.7x		4.0x		(1.3x)			2.8x		3.4x		(0.6x)
Debt service coverage based on adjustediEBITDA(1)	1.7x		2.2x		(0.5x)			1.7x		1.9x		(0.2x)
(1) This is a non-IFRS financial measure with no standardized IFRS meaning and may not be comparable to other issuers. Refer to the section “Non-IFRS financial measures”

EARNINGS WEBCAST
Canadian Net will host a webcast on March 23^rd, 2023, at 10:00 am (EST) in order to discuss the results.

The link to join the webcast is the following: https://edge.media-server.com/mmc/p/cxgnnv3r

About Canadian Net – Canadian Net Real Estate Investment Trust is an open-ended trust that acquires and owns high-quality triple net and management-free commercial real estate properties.

Forward-Looking Statements - This press release contains forward-looking statements and information as defined by applicable securities laws. Canadian Net warns the reader that actual events may differ materially from current expectations due to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated in such statements. Among these include the risks related to economic conditions, the risks associated with the local real estate market, the dependence to the financial condition of tenants, the uncertainties related to real estate activities, the changes in interest rates, the availability of financing in the form of debt or equity, the effects related to the adoption of new IFRS standards, as well as other risks and factors described from time to time in the documents filed by Canadian Net with securities regulators, including the management report. Canadian Net does not update or modify its forward-looking statements even if future events occur or for any other reason unless required by law or any regulatory authority.

Neither the TSX Venture Exchange Inc. nor its Regulatory Services Provider (as that term is defined in the Policy of the TSX Venture Exchange and its Regulatory Services Provider) accepts any responsibility for the adequacy or accuracy of this release.

The December 31^th, 2022, financial statements and management discussion & analysis of Canadian Net may be viewed on SEDAR at www.sedar.com.

For further information please contact Jason Parravano at (450) 536-5328.