Parkit Enterprise Reports Q1 2025 Results

Rhea-AI Summary

Parkit Enterprise (PKTEF) reported strong Q1 2025 results with significant growth across key metrics. The company acquired a new industrial property in Boisbriand, Quebec for $10.3 million, spanning 62,680 square feet on 2.5 acres. Financial highlights include an 18% increase in investment properties revenue to $7.12 million and a 21% rise in net rental income to $4.89 million. The company achieved impressive leasing activity, renewing 68,000 square feet at 24% higher rates and signing new leases for 43,000 square feet. FFO grew by 22% to $1.68 million, while same-property NOI increased by 10%. Despite these operational improvements, Parkit reported a net loss of $1.52 million, primarily due to unrealized losses from derivative instruments and increased finance costs. The company maintains a strong balance sheet with over $3.1 million in cash and 94% fixed-rate debt.

Positive

• Investment properties revenue increased 18% YoY to $7.12 million
• Net rental income grew 21% YoY to $4.89 million
• Same property NOI growth of 10% YoY
• FFO increased 22% to $1.68 million
• Successfully renewed 68,000 sq ft at 24% higher rates
• Strong liquidity position with $3.1 million cash and available credit facilities
• 94% of debt is fixed-rate, reducing interest rate risk

Negative

• Net loss of $1.52 million compared to net income of $164,871 in Q1 2024
• Parking operations reported a loss of $196,701 vs income of $58,993 last year
• Higher financing costs impacting bottom line
• Unrealized losses from derivative financial instruments

Toronto, Ontario--(Newsfile Corp. - May 8, 2025) - Parkit Enterprise Inc. (TSXV: PKT) ("Parkit" or the "Company"), today reported the Company's first quarter 2025 results. Steven Scott, Chair of Parkit, commented:

"Parkit started the year with an acquisition of a new property in Boisbriand, Quebec and continued its strong financial performance. We grew our net rental income and margins in Q1 2025, resulting in a year over year same property NOI growth of 10% and FFO growth of 25%. We renewed 68,000 square feet of leases at 24% higher rates and signed new leases on 43,000 square feet of space. We continue to maintain a strong balance sheet with 94% of our debt being fixed, and will continue to be disciplined on acquisitions, and we expect to increase revenue, NRI and FFO in the upcoming year."

2025 Q1 Results and Recent Business Highlights

• Acquisitions and Industrial Operations. Parkit acquired an industrial property for $10.3 million consisting of 62,680 gross square feet on 2.5 acres during the three months ended March 31, 2025. With this acquisition, Parkit continued to grow its portfolio and add to its presence in key markets.

• Investment properties revenue and net rental income. Investment properties revenue and net rental income increased as the Company increased its investment properties, signed new leases and streamlined operations. Investment properties revenue for the three months ended March 31, 2025 increased by 18% to $7,121,141, compared to $6,058,520 for the three months ended March 31, 2024. Net rental income ("NRI"), increased by 21% to $4,886,036, for the three months ended March 31, 2025 compared to $4,030,416 for the three months ended March 31, 2024.

• Stabilized Comparative Properties NOI. Stabilized Comparative Properties NOI, a Non-IFRS Measure, increased by 10%, to $4,368,553, for the three months ended March 31, 2025 compared to $3,978,322, for the three months ended March 31, 2024, as the Company executed renewals with tenants and maximized occupancy.

• Leasing at market rental spreads. During the three months ended March 31, 2025, Parkit renewed 68,000 square feet with three tenants at 24% higher rates and signed new leases for 43,000 square feet with two tenants at market rates.

• Funds from operations ("FFO") increased for the period. The FFO, a Non-IFRS Measure, for the three months ended March 31, 2025 increased by 22%, or 25% per common share, to $1,681,551, compared to FFO of $1,379,969, respectively for the three months ended March 31, 2024. The increase in FFO was a result of additional NRI from investment properties offset by higher financing costs.

• Liquidity position. The Company maintained a strong liquidity position with cash and cash equivalents of over $3,100,000 at the end of the period. The Company has unencumbered assets and significant availability on its credit facilities to fund future acquisitions.

• Cash flows. Parkit's cash flow from operations was $4,399,171 for the three months ended March 31, 2025, compared to $3,051,907 received for the three months ended March 31, 2024. The increase in cash from operating activities is a result of increased revenues and an increase in cash provided by working capital. Parkit used net cash of $10,915,067 in investing activities for the three months ended March 31, 2025, compared to cash used of $378,887 from investing activities for the three months ended March 31, 2024. The higher net cash outflow is a result of investment property acquisition during this period compared to none in the same comparative period. Parkit received net cash of $4,177,299 from financing activities for the three months ended March 31, 2025, compared to cash used of $2,051,746 for the three months ended March 31, 2024. The increase in cash used was a result of proceeds from debt financing less amounts paid for Company shares purchased under its Normal Course Issuer Bid, repayment of debt, interest paid and debt issuance costs.

• Net (loss) income for the period. The Company had a net loss of $1,520,800 for the three months ended March 31, 2025, compared to net income of $164,871, for the three months ended March 31, 2024. The change is a result of an increase in net rental income, offset by net parking loss, unrealized losses from derivative financial instruments, depreciation and finance costs.

• Net parking (loss) income for the period. Net parking income includes parking properties income and the share of loss from equity accounted investees. The net parking loss was $196,701 for the three months ended March 31, 2025, compared to income of $58,993 for the three months ended March 31, 2024. The quarterly losses are a result of seasonality from operations, additional depreciation from property and equipment, a decline in air travel, and an increased financing cost. The results should improve with seasonality, though the economic environment remains uncertain.

Parkit is focused on growing and maximizing cash flows on its industrial portfolio, while streamlining operations of its parking properties.

Further Information

For comprehensive disclosure of Parkit's performance for the three months ended March 31, 2025 and its financial position as at such date, please see Parkit's Condensed Consolidated Interim Financial Statements and Management's Discussion and Analysis for the three months ended March 31, 2025 filed on SEDAR+ at www.sedarplus.ca.

Non-IFRS Measures

Management uses both IFRS and Non-IFRS Measures to assess the financial and operating performance of the Company'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:

Funds from Operations ("FFO") is a Non-IFRS Measure of operating performance as it focuses on cash flow from operating activities. REALPAC is the national industry association dedicated to advancing the long-term vitality of Canada's real property sector. REALPAC defines FFO as net income (calculated in accordance with IFRS), adjusted for, among other things, depreciation, transaction costs, gains and losses from property dispositions, foreign exchange, as well as other non-cash items. The Company believes that FFO can be a beneficial measure, when combined with primary ‎IFRS measures, to assist in the evaluation of the Company'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.

FFO should not be viewed as an alternative to, in isolation from, or superior to, net income or cash flow from operations, or results from Parkit's comprehensive operations, respectively, or other measures calculated in accordance with IFRS. FFO 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. FFO is simply an additional measure of operating performance which highlight trends in Parkit's core business that may not otherwise be apparent when relying solely on IFRS financial measures. Parkit's management also uses this Non-IFRS Measure in order to facilitate operating performance comparisons from period to period and to prepare operating budgets. In addition, while Parkit's methods of calculating FFO comply with REALPAC recommendations, FFO may differ from and not be comparable to FFO used by other companies.

The following table indicates how Parkit reconciles FFO to the nearest IFRS measure.

		Three months ended March 31, 2025			Three months ended March 31, 2024			Change in $			Change in %
Net (loss) income and comprehensive (loss) income	$	(1,520,800	)	$	164,871		$	(1,685,671	)		(1,022.4%)
Add / (deduct):
Share of loss from equity-accounted investees		180,037			122,438			57,599			47.0%
Depreciation		2,391,473			2,123,134			268,339			12.6%
Unrealized loss (gain) on derivative financial instruments		635,154			(1,090,173	)		1,725,327			(158.3%)
Foreign exchange (gain) loss		(4,313	)		59,699			(64,012	)		(107.2%)
FFO	$	1,681,551		$	1,379,969		$	301,582			21.9%
FFO per share	$	0.01		$	0.01		$	0.00			24.9%

 

"Stabilized Comparative Properties NOI" is a non-IFRS financial measure used by management in evaluating the performance of properties fully owned by the Company in the current and prior year comparative periods. Stabilized Comparative Properties NOI enables investors to evaluate our operating performance, especially to assess the effectiveness of our management of properties generating NOI growth from existing properties. Stabilized Comparative Properties NOI is not defined by IFRS Accounting Standards, does not have a standard meaning and may not be comparable with similar measures presented by other issuers.

Net operating income ("NOI") is a non-IFRS measure commonly used as a measurement tool in real estate businesses. NOI is equal to net rental income ("NRI") presented in the Corporation's Financial Statements. NRI is defined as investment properties revenue less investment properties operating costs. NRI does not include interest expense or income, depreciation and amortization, corporate administrative costs, share-based compensation costs or taxes. NRI assists management in assessing profitability and valuation from principal business activities.

Both Stabilized Comparative Properties NOI and NOI should not be viewed as alternatives to, in isolation from, or superior to, net income or cash flow from operations, or results from Parkit's comprehensive operations, respectively, or other measures calculated in accordance with IFRS. Both Stabilized Comparative Properties NOI and NOI should not be interpreted as indicators of cash generated from operating activities and neither are indicative of cash available to fund operating expenditures, or for the payment of cash distributions. Both Stabilized Comparative Properties NOI and NOI are simply additional measures of operating performance which highlight trends in Parkit's core business that may not otherwise be apparent when relying solely on IFRS financial measures. In addition, Parkit's definition of, and use of, both Stabilized Comparative Properties NOI and NOI, respectively, may differ from, and not be comparable to, Stabilized Comparative Properties NOI and NOI used by other companies.

When comparing the Stabilized Comparative Properties NOI on a year-over-year basis for the three and twelve months, the Company excludes investment properties acquired on or after the beginning of the prior year period. For the three months ended March 31, 2025 and March 31, 2024, the Company excludes investment properties acquired on or after January 1, 2024. The Stabilized Comparative Properties NOI is calculated by taking NOI and excluding the impact of NOI from acquisitions, NOI from straight-line rent and NOI from unstabilized properties.

The Company reconciles the Stabilized Comparative Properties NOI to net rental income as follows:

		Three months ended March 31, 2025			Three months ended March 31, 2024			Change in $			Change in %
Stabilized comparative properties NOI	$	4,368,553		$	3,978,322		$	390,231			10%
NOI from newly acquired properties		382,427			-			382,427
Straight line rent		212,166			193,920			18,246
NOI from unstabilized properties		(77,110	)		(141,826	)		64,716
Net Rental income	$	4,886,036		$	4,030,416		$	855,620			21%

 

About Parkit Enterprise Inc.

Parkit Enterprise is an industrial real estate platform focused on the acquisition, growth and management of strategically located industrial properties across key urban markets in Canada. In addition, Parkit has parking assets across various markets in the United States of America. Parkit's Common Shares are listed on TSX-V (Symbol: PKT).

For more information, please contact Mr. Carey Chow, Mr. Iqbal Khan or Mr. Steven Scott:

Investor Relations
Contact Number: 1-888-627-9881
Email: ir@parkitenterprise.com

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the ‎policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.‎

Forward-Looking Information: This news release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, included herein are forward-looking information. In particular, this news release contains forward-looking information in relation to: Parkit continuing to be disciplined on acquisitions, and Parkit's expectations to increase revenue, NRI and FFO for 2025; Parkit's focus on growing and maximizing cash flows on its industrial portfolio, while streamlining operations of its parking properties; and Parkit's focus on the acquisition, growth and management of strategically located industrial properties across key urban markets in Canada. This forward-looking information reflects Parkit's current beliefs and is based on information currently ‎available to Parkit and on assumptions Parkit believes are reasonable. These assumptions ‎include, but are not limited to: the level of activity in the industrial real estate business and the economy generally; continued consumer interest in Parkit's services and products; Parkit's continued ability to ‎acquire properties that are in-line with its strategic focus, including prioritizing environmental investments; ‎Parkit's continuing ability to grow its portfolio of investment properties; and Parkit's past results ‎continuing to be an indicator of future results. ‎Forward-looking information is subject to known and unknown risks and uncertainties that may cause the actual results, performance or developments to differ materially from those contained in or implied by such forward-looking information. These risks, uncertainties, and factors may include, but are not limited to: general business, economic, competitive, political and social uncertainties; general capital market conditions ‎and market prices for securities; delay or failure to receive board of directors, third party or regulatory approvals; the actual ‎results of Parkit's future operations; competition; changes in legislation, including environmental ‎legislation, affecting Parkit; the timing and availability of external financing on acceptable terms; ‎conclusions of economic evaluations and appraisals; the lack of qualified, skilled labour or loss of key individuals; and the impact that the imposition of trade tariffs, particularly from the United States, may have on the global economy, and the economy in Canada in particular. A description of ‎additional risk factors that may cause actual results to differ materially from forward-looking information can ‎be found in Parkit's disclosure documents on the SEDAR+ website at www.sedarplus.ca. ‎Although Parkit has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. Readers are cautioned that the foregoing list of risks, uncertainties and factors is not exhaustive. Accordingly, readers should not place undue reliance on forward-looking information. Readers are further cautioned not to place undue reliance on forward-looking information as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking information contained in this news release is expressly qualified by this cautionary statement. The forward-looking information contained in this news release represents the expectations of Parkit as of the date of this news release and, accordingly, is subject to change after such date. However, Parkit expressly disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities law.

The expectations to continue to be disciplined on acquisitions and to increase Parkit's revenue, NRI and FFO for 2025 contained in this news release may be considered a financial outlook as defined by applicable securities legislation. Such information and any other financial outlooks contained in this news release have been approved by management of Parkit as of the date hereof. Such financial outlooks are provided for the purpose of presenting information about management's current expectations and goals relating to the future business of Parkit. Readers are cautioned that reliance on such information may not be appropriate for other purposes.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/251345

FAQ

What were Parkit Enterprise's (PKTEF) key financial results for Q1 2025?

In Q1 2025, Parkit's revenue grew 18% to $7.12M, net rental income increased 21% to $4.89M, and FFO rose 22% to $1.68M. However, the company reported a net loss of $1.52M compared to net income of $164,871 in Q1 2024.

How much property did Parkit acquire in Q1 2025 and where?

Parkit acquired an industrial property in Boisbriand, Quebec for $10.3 million, consisting of 62,680 gross square feet on 2.5 acres.

What was PKTEF's leasing performance in Q1 2025?

Parkit renewed 68,000 square feet with three tenants at 24% higher rates and signed new leases for 43,000 square feet with two tenants at market rates.

What is Parkit's current liquidity position as of Q1 2025?

Parkit maintained a strong liquidity position with cash and cash equivalents of over $3.1 million, plus unencumbered assets and significant availability on credit facilities.

Why did Parkit (PKTEF) report a net loss in Q1 2025?

The net loss was primarily due to unrealized losses from derivative financial instruments, increased finance costs, and losses from parking operations, despite strong operational performance in the real estate segment.