May 2, 2008 / 4:08 PM / in 10 years

RioCan REIT profit drops, says will hit '08 target

TORONTO (Reuters) - Canada’s RioCan Real Estate Investment Trust (REI_u.TO) reported a lower first-quarter profit on Friday, hurt by various one-time charges as it moved to new headquarters and its chief financial officer left the company.

The trust said it earned C$30.3 million ($29.7 million), or 14 Canadian cents a unit, in the three months ended March 31, down from C$37.4 million, or 18 Canadian cents a unit, a year earlier.

Aside from the one-time charges, which amounted to C$3.2 million, RioCan said it was hit by depreciation of income properties totaling C$3.4 million.

“We are satisfied with our results for the first quarter and remain confident that our full-year results will be in line with our expectations,” said Edward Sonshine, RioCan’s president and chief executive, in a statement.

Funds from operations, a key measure used by real estate companies, were C$67.7 million, or 32 Canadian cents a unit, during the quarter, down from C$71.3 million, or 35 Canadian cents a unit, a year earlier.

The market had been expecting FFO, on average, of 35 Canadian cents a unit, according to Reuters Estimates.

Rental revenue rose 5 percent to C$173.1 million from C$165 million. RioCan said its portfolio occupancy at the end the quarter was 96.6 percent.

RioCan is Canada’s largest real estate investment trust with a total market capitalization of around C$7.9 billion.

Units of the trust were up 19 Canadian cents, or 0.9 percent, at C$21.84, on the Toronto Stock Exchange shortly before noon on Friday.

($1=$1.02 Canadian)

Reporting by John McCrank; Editing by Peter Galloway

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