TSX:AX.P.E - Post by User
Comment by
Frankie10on Apr 19, 2023 11:43am
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Post# 35403108
RE:TD comments
RE:TD commentsDamn, a quarter of AFFO falling off because of higher interest expense... not sure this makes sense though... rates did not meaningfully increase during Q1 and the debt was already variable and unhedged... furthermore, Artis paid down hundreds of millions of debt in Q4 (I assume oppertunistically repaying the most expensive debt at the time).
I'm sure the guys at TD spent much more time than me digging into the numbers, but that said I don't see how that simple explaination fits their conclusion.
They are probably comparing Q1'23 to Q1'22. AFFO per unit in Q1'22 was 24 cents - a 27% decrease brings us to 17.5 cents AFFO for Q1'24, compared to 19 cents in Q4'23. Which is inline with my above comments that AFFO should not fall too much from Q4'22 to Q1'23. An AFFO of 17.5 cents would mean an 86% payout ratio of AFFO. Still manageable and comparable to peers.
Not as bad as it reads on the surface. AFFO will get a lift when the industrial developments (already leased) come online and generate NOI or are sold and reduce debt/interest expense.
I am chilling boys. Cheers.