Artis Real Estate Investment Pref Shs Series E T.AX.P.E

Expect a dividend cut

[oilinvestor52]

Cut will likely be coming when AX announces next Q

[Catchtherally]

Why do you say that?

[EstevanOutsider]

I find that unlikely given the # of share bought back by Artis + the retired floating rate debt in 2023 which will save around $6 million of annualized interest payments. Also if Artis can get more money from Cominar on the 18% bond instead of shares there is little to worry about. Biggest risk is that the debenture was put onto the credit facility rather than retired with asset sales. I still

[Catchtherally]

I agree. AFFO is 90% for 6 months ending. It says this includes realizes losses on investments which they took on D but doesn't actually change cash flow. With almost 2 billion of unecombered assets they are not squabbling over the dividend during this strategic review. They are looking at selling assets. Spin off could be considered but Manji seemed opposed to that idea during the last call.

[InvestSmarter]

AFFO (100% Payout) and FFO (~58% Payout) you are looking at removes losses from D and FCR. Its the best representation of true FFO. Having said that, change expensive variable debt to fixed and pay down variable debt with asset sales will be the best move to improve AFFO/FFO. More pain to come though before it gets better.  

[InvestSmarter]

No cut. 1 - Samir said straight out he is doing a Strategic Review to close the gap between NAV and trading price. A cut is the complete opposite. 2 - AFFO is artificially low due to debt being temporarily non fixed (short term) to leave all their options open for this Strategic Review. 3 - Return of Capital is completely fine especially when you have hundreds of millions in asset Sales per

[jmkOttawa]

There is no basis for this comment. And they don't pay dividends. It's a distribution.

[jmkOttawa]

This would be impossible since Artis does not and never has paid a dividend. I don't believe they will cut the distribution either.

[oilinvestor52]

Well I should have said technically a "distribution". My opinion is the same and antisipate a distribution cut on the horizon. Just my personal opinion. I hope not, as it is a large holding and the only REIT I kept based on Sandpipers track record, the significant investment by insiders, and all the buybacks.  Donald

[DZtrader]

I don't really think the strategic review would necessarily have anything to do with a distribution cut as part of its process. That is not to say that consideration couldn't be given in the overall grand scheme of things going forward. Having said all of that, I personally do not believe a cut is in the cards here, for the least of which it would cause considerable pain to insiders

[jmkOttawa]

Well put. The earliest that I expect to possibly hear any color on the strategic review is Nov 2/3.  It was clearly stated that the goal was to close the trading value to NAV, which a distribution cut would not achieve. Although the current return appears high at close to 10 percent, this is not a 7 dollar REIT. It is fairly priced closer to 12 dollars and at that unit price the return does

[EstevanOutsider]

So far in 2023, Artis killed $355.8 million of floating rate debt + will save $5 million on unit payments canceled through the NCIB programs on commons + preferred units. Can anybody explain how they would be required to cut the distribution? Again, if they were forced to put the 2023 on the debenture it would presumably offset some progress in the short-term pending further assets sales to