Net income was
We sold 82 single-family lots in our
Leasing activity in our
Golf course operations got underway in April and will contribute to results in the second quarter.
First Quarter Results
Given the longer term nature of real estate development, comparison of any three-month period may not be meaningful.
The market has been challenged by inflation and higher interest rates over the past year. Our
Demand for homes remained stable across our geographically dispersed
On
Overall revenue from our income producing properties was up 1% in Q1-2023 despite the sale of the
FINANCIAL HIGHLIGHTS
Revenue was down 32% to
FFO was down 34% or
Net income was
DIVISIONAL OPERATING HIGHLIGHTS
The
The
Total GLA under management varies period over period as a result of both property transfers and remeasures of property that typically occur on lease transfers and/or renewals. Revenue from our
We sold 3 residential units in the US in Q1-2023. Improved occupancy on our Canadian assets and REIT owned properties contributed to revenue growth.
The investment properties portfolio fair value decreased
Our golf courses (
RETURNING VALUE
We continue to return value to our shareholders and unitholders:
- On
May 10, 2023 we declared a quarterly dividend of$0.16 per share, payable onJune 30, 2023 to shareholders of record onJune 15, 2023 . The dividend is an eligible dividend for Canadian tax purposes.
Melcor REIT:
- The REIT has paid monthly distributions of
$0.04 per unit in Q1-2023. - Subsequent to the quarter, the REIT declared distributions for April, May and June as follows:
Month | Declaration Date | Record Date | Distribution Date | Distribution Amount |
Selected Highlights
($000s except as noted) | Three months ended | ||||
2023 | 2022 | Change % | |||
Revenue | 36,077 | 53,306 | (32) | ||
Gross margin1 | 50.5 | % | 47.2 | % | 7 |
Net income | 2,153 | 2,470 | (13) | ||
Net margin1 | 6.0 | % | 4.6 | % | 30 |
FFO2 | 7,045 | 10,697 | (34) | ||
Per Share Data ($) | |||||
Basic earnings | 0.07 | 0.08 | (13) | ||
Diluted earnings | 0.07 | 0.07 | — | ||
FFO3 | 0.23 | 0.33 | (30) | ||
Dividends | 0.16 | 0.14 | 14 |
As at ($000s except share and per share amounts) | Change % | ||
Total assets | 2,112,238 | 2,167,050 | (2.5) |
Shareholders' equity | 1,175,891 | 1,178,336 | (0.2) |
Total shares outstanding | 31,248,628 | 31,248,628 | — |
Per Share Data ($) | |||
Book value(3) | 37.63 | 37.71 | (0.2) |
1 Supplementary financial measure. Refer to the Non-GAAP and Non-Standard Measures section for further information.
2 Non-GAAP financial measure. Refer to the Non-GAAP and Non-Standard Measures section for further information.
3 Non-GAAP financial ratio. Refer to the Non-GAAP and Non-Standard Measures section for further information.
MD&A and Financial Statements
Information included in this press release is a summary of results. This press release should be read in conjunction with Melcor’s consolidated financial statements and management's discussion and analysis for the three months ended
Non-GAAP & Non-Standard Measures
FFO is a key measures of performance used by real estate operating companies; however, that is not defined by International Financial Reporting Standards (“IFRS”), do not have standard meanings and may not be comparable with other industries or income trusts. This non-IFRS measures are more fully defined and discussed in the Melcor’s management discussion and analysis for the period ended
Funds from operations (FFO): FFO is a non*GAAP financial measure and is defined as net income in accordance with IFRS, excluding (i) fair value adjustments on investment properties; (ii) gains (or losses) from sales of investment properties; (iii) amortization of tenant incentives; (iv) fair value adjustments, interest expense and other effects of redeemable units classified as liabilities; (v) acquisition costs expensed as a result of the purchase of a property being accounted for as a business combination; (vi) adjustment for amortization of deferred financing fees, which is included in non-cash financing costs and (vii) fair value adjustment on derivative instrument, after adjustments for equity accounted entities, joint ventures and non-controlling interests calculated to reflect FFO on the same basis as consolidated properties. See tables below for reconciliation of FFO:
Consolidated | ||
($000s) | Three-months | |
Net income for the period | 2,153 | 2,470 |
Amortization of operating lease incentives | 2,320 | 1,407 |
Fair value adjustment on investment properties | 2,484 | 2,522 |
Depreciation on property and equipment | 145 | 156 |
Stock based compensation expense | 230 | 117 |
Non-cash finance costs | 2,778 | (1,472) |
Deferred income taxes | (732) | (181) |
Fair value adjustment on REIT units | (2,333) | 5,678 |
FFO | 7,045 | 10,697 |
Investment Properties | ||
($000s) | Three-months | |
Segment Earnings | 3,500 | 5,112 |
Fair value adjustment on investment properties | 1,939 | 218 |
Amortization of operating lease incentives | 761 | 365 |
Divisional FFO | 6,200 | 5,695 |
REIT | ||
($000s) | Three-months | |
Segment Earnings | 8,292 | 6,513 |
Fair value adjustment on investment properties | 1,586 | 3,662 |
Amortization of operating lease incentives | 1,058 | 901 |
Divisional FFO | 10,936 | 11,076 |
Gross margin (%): Gross margin percent is a supplementary financial measure that indicates the relative efficiency with which we earn revenue. This ratio is calculated by dividing gross profit by revenue.
Net margin (%): Net margin percent is a supplementary financial measure that indicates the relative efficiency with which we earn income. This ratio is calculated by dividing net income by revenue.
Book value per share: Book value per share is a non-GAAP financial ratio and is calculated as shareholders' equity over number of common shares outstanding.
About
Melcor is a diversified real estate development and asset management company that transforms real estate from raw land through to high-quality finished product in both residential and commercial built form. Melcor develops and manages mixed-use residential communities, business and industrial parks, office buildings, retail commercial centres and golf courses. Melcor owns a well diversified portfolio of assets in
Melcor has been focused on real estate since 1923. The company has built over 170 communities and commercial projects across
Melcor’s headquarters are located in
Forward Looking Statements
In order to provide our investors with an understanding of our current results and future prospects, our public communications often include written or verbal forward-looking statements.
Forward-looking statements are disclosures regarding possible events, conditions, or results of operations that are based on assumptions about future economic conditions, courses of action and include future-oriented financial information.
This news release and other materials filed with the Canadian securities regulators contain statements that are forward-looking. These statements represent Melcor’s intentions, plans, expectations, and beliefs and are based on our experience and our assessment of historical and future trends, and the application of key assumptions relating to future events and circumstances. Future-looking statements may involve, but are not limited to, comments with respect to our strategic initiatives for 2023 and beyond, future development plans and objectives, targets, expectations of the real estate, financing and economic environments, our financial condition or the results of or outlook of our operations.
By their nature, forward-looking statements require assumptions and involve risks and uncertainties related to the business and general economic environment, many beyond our control. There is significant risk that the predictions, forecasts, valuations, conclusions or projections we make will not prove to be accurate and that our actual results will be materially different from targets, expectations, estimates or intentions expressed in forward-looking statements. We caution readers of this document not to place undue reliance on forward-looking statements. Assumptions about the performance of the Canadian and US economies and how this performance will affect Melcor’s business are material factors we consider in determining our forward-looking statements. For additional information regarding material risks and assumptions, please see the discussion under Business Environment and Risk in our annual MD&A and the additional disclosure under Business Environment and Risk in this MD&A.
Readers should carefully consider these factors, as well as other uncertainties and potential events, and the inherent uncertainty of forward-looking statements. Except as may be required by law, we do not undertake to update any forward-looking statement, whether written or oral, made by the company or on its behalf.
Contact Information: Investor Relations Tel: 1.855.673.6931 ir@melcor.ca
Source:
2023 GlobeNewswire, Inc., source