August 11, 2010 / 6:38 PM / 8 years ago

UPDATE 1-Crombie REIT posts lower Q2 profit, misses view

* Says continues to seek acquisitions

* Property revenue up 4 pct

Aug 11 (Reuters) - Crombie Real Estate Investment Trust (CRR_u.TO) posted a 12 percent drop in funds from operations (FFO) and missing estimates, as it was hurt by a rise in interest expense and leasing costs.

In the second quarter, the REIT’s FFO fell to C$16.6 million, or 26 Canadian cents a unit, from C$18.7 million, or 35 Canadian cents a unit, a year ago. Funds from operations is a property measure that strips out the distorting effects of depreciation and other factors from earnings.

On an adjusted basis, the REIT posted FFO of 21 Canadian cents a unit, while analysts were looking for 29 Canadian cents a share, according to Thomson Reuters I/B/E/S.

Interest expense rose 31 percent to C$14.7 million.

For the second-quarter, property revenue rose 4 percent to C$52.8 million, and property occupancy rose to 95.5 percent from 94.1 percent last year.

Crombie said it continues to seek acquisitions from existing relationships with Empire Co and Sobeys as well as from third parties.

Units of the REIT were trading relatively flat at C$11.23 Wednesday afternoon on the Toronto Stock Exchange. (Reporting by Gowri Jayakumar in Bangalore; Editing by Roshni Menon)

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