Morguard - CEO, Kuldip Rai Sahi
CEO, Kuldip Rai Sahi
Source: Morguard
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  • Morguard Real Estate Investment Trust (TSX:MRT-UN) has halved their dividends for May 2020
  • The company posted a dip of 5.8 per cent in revenue for the quarter, primarily due to Obsidian Energy’s rent abatement agreement
  • Obsidian Energy’s original lease for the majority of the company’s Penn West Plaza building was C$28.6 million annually
  • That has now been reduced to just $10 million for the year, or $9.2 million on a pro rata basis
  • Morguard Real Estate Investment Trust (MRT-UN) is down 13 per cent to $5.64 per share and has a market cap of $374 million

Morguard Real Estate Investment Trust (TSX:MRT-UN) has announced it is halving its dividends for May 2020.

The company said it will decrease the monthly cash distribution. The annualised distribution total of C$0.96 cents (or 8 cents per month) will now shrink to $0.48 cents (or 4 cents per month). This will be effective for the month of May, payable in the June distribution cycle.

This is on the back of COVID-19, as the company also has announced the pandemic and its effects has reduced revenue by just over $4 million for the first quarter.

The company’s revenue dipped from approximately $70.5 million in the first quarter of 2019 to approximately $66.4 million this year.

The 5.8 per cent dip was due to the rent relief granted to Obsidian Energy, one of the company’s tenants in its corporate rental spaces. Energy companies have been hit by COVID-19 shutdowns in the global economy, coupled with a price war between Saudi Arabia and Russia that pushed international oil prices to their lowest levels ever.

Other numbers from the companies financials show some pain, with net operating income sliding 8 per cent compared to 2019. This decline was due to the enclosed mall segment and the decline in income from Penn West Plaza, the building that houses Obsidian Energy.

Obsidian was scheduled to pay $28.6 million in rent and recoveries from February to December 2020. Obsidian has now received a rent abatement which adjusts their obligations to $10.0 million annually, or $9.2 million for 2020 on a pro rata basis.

The company’s CEO, Kuldip Rai Sahi, said “the unprecedented COVID-19 global event has demonstrated our strength and resilience as an organisation.”

“By activating our crisis management team, and allocating appropriate resources, we have coordinated efforts across our portfolios and taken definitive action to ensure the health and well being of those around us.

“At this unique time, we celebrate our employees and service partners who continue to provide exceptional service to Morguard communities across North America by upholding our core values” he added.

Morguard Real Estate Investment Trust (MRT-UN) is down 13 per cent to $5.64 per share at 3:50pm EDT.

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