EPS came in at ($3.57) and revenues came in at $150.9M vs. $142.3M expected. AP.UN's operating income rose 6% over the past year, however, it experienced a net loss of $499M due to a significant drop in fair value on its investment properties. This was largely driven by a drop in development property valuations in Toronto and Montreal, and rental property valuations in Toronto, Montreal, Calgary, and Vancouver. FFO increased over the prior quarter, however, management expects its metrics in the first half of 2024 to contract, as it assumes no economic occupancy gains in that period. Its interest expenses have been climbing recently, but operating income and rental revenue have risen. Certain analysts cut their price targets on AP.UN. Its yield is attractive, but the direction in property valuations is hurting the company's financials, however, this can change if the real estate market finds a floor. We would prefer not to buy into this weak momentum, and would instead like to see its financials and price stabilize before adding here. Payout ratio was 80%. The company should be able to maintain its distribution barring further weakness.
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