Retirement News : Seniors : Retirement Residences REIT swings to loss of $4.8M in Q1 from $7.3 ...

Retirement Residences REIT swings to loss of $4.8M in Q1 from $7.3 ...

Date Added: 11-05-2005

Retirement Residences Real Estate Investment Trust has swung to a loss of $4.8 million in the first quarter, from a profit of $7.3 million a year earlier, hurt by competition as the Ontario government adds thousands of long-term-care beds.

The loss for the period ended March 31 was 52 cents per diluted unit on revenues of $258.3 million, compared with net income of 92 cents a unit on revenue of $250.8 million. The trust (TSX:RRR.UN) had a one-time future income tax benefit of $10 million in the first quarter of 2004, it noted.

"Performance in our Ontario retirement and long-term care homes continues to be challenged by the addition of 20,000 new long-term care beds in Ontario," the trust said in a release.

Toronto-area markets, as well as those north and west of the city, are expected to continue to be oversupplied in 2006, the trust said, and homes in these markets are expected to continue experiencing "reduced financial results."

In contrast, homes in the company's Lifestyle portfolio have been "very positive" and continue to perform above expectations, the trust said.

Net operating income for the Canadian retirement operations in the first quarter fell to $29.5 million from $30.6 million, but Canadian long-term care operations increased to $18.8 million from $18.2 million.

The trust also acquired six properties during the quarter, with a total of $112.1 million invested in 849 units outside Ontario.

The trust is the largest provider of accommodation and care for seniors in Canada and owns 213 retirement and long-term care prperties, including 32 in the United States. It also provides management services to 11 homes for other parties, nursing placement and in-home health care.

On the Toronto Stock Exchange, units in Retirement Residences REIT were down eight cents to $9.37 Tuesday morning.

For More Information:

http://www.canada.com/businesscentre/story.html?id=a70cb0c5-e5bd-48cb-836c-21f61b011040