Dundee Corporation (TSX:DC.A)(TSX:DC.PR.A)(TSX:DC.PR.B) (the
"Corporation") is today reporting its financial results as at and
for the three and six months ended June 30, 2012. The Corporation's
unaudited condensed interim consolidated financial statements,
along with the accompanying management's discussion and analysis,
have been filed on the System for Electronic Document Analysis and
Retrieval ("SEDAR") and may be viewed under the Corporation's
profile at www.sedar.com or the Corporation's website at
www.dundeecorp.com.
FINANCIAL HIGHLIGHTS
-- Fee Earning Assets under Management and Administration - Fee earning
assets under management and administration increased to $15.0 billion at
June 30, 2012, compared with $11.7 billion at June 30, 2011 and $12.3
billion at December 31, 2011.
-- Equity Accounted Investments - Earnings from equity accounted
investments were $11.7 million during the second quarter of 2012
compared with $14.1 million earned during the same period of the prior
year. At June 30, 2012, the market value of equity accounted investments
was $599.6 million.
-- Market Value of Investments - The market value of the Corporation's
portfolio of investments, excluding equity accounted investments, was
$1.4 billion at June 30, 2012, and included $0.8 billion in shares of
The Bank of Nova Scotia which were received by the Corporation on its
divestment of DundeeWealth Inc.
-- Net Loss - During the second quarter, the Corporation incurred a loss of
$16.8 million attributable to owners of the parent, representing a loss
per share of $0.34. This compares with net earnings attributable to
owners of the parent of $21.0 million during the same period of the
prior year, or $0.27 per share on a fully diluted basis. Included in the
net loss during the second quarter of 2012 is a $34.0 million loss from
investments.
-- Corporate Debt at June 30, 2012 was $508.3 million and included $265.3
million borrowed in our real estate and resource based subsidiaries.
SECOND QUARTER 2012 SEGMENTED RESULTS OF OPERATIONS
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For the three and Three Months Six Months
six months ended June 30, 2012 2011 2012 2011
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Net earnings (loss) before income
taxes from:
Real estate segment $ 36,852 $ 12,926 $ 49,737 $ 24,649
Resource segment 1,882 7,973 2,663 15,231
Agriculture segment (354) - (1,070) -
Asset management segment (30,299) 12,076 3,436 10,553
Capital markets segment (5,893) 4,346 (2,128) 9,599
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2,188 37,321 52,638 60,032
Income taxes (10,664) (12,999) (25,575) (18,021)
Discontinued operations:
Loss, net of taxes - - - (20,000)
Gain on sale of discontinued
operations, net of taxes - - - 870,828
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Net earnings (loss) for the period $ (8,476) $ 24,322 $ 27,063 $892,839
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Net earnings (loss) attributable
to:
Owners of the parent
Continuing operations $ (16,795) $ 21,006 $ 15,666 $ 35,170
Discontinued operations - - - 861,158
Non-controlling interest 8,319 3,316 11,397 (3,489)
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$ (8,476) $ 24,322 $ 27,063 $892,839
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At June 30, 2012, fee earning assets under management and
administration had increased to $15.0 billion, representing a 28%
increase over $11.7 billion in fee earning assets under management
and administration at June 30, 2011, and a 22% increase over fee
earning assets under management and administration at December 31,
2011. A significant part of this growth occurred in the real estate
asset management division, which benefited from a number of
successful new acquisitions of quality assets, including a 67%
interest in the Scotia Plaza complex, a premier office complex
located in downtown Toronto. Correspondingly, management fee
revenue increased over 60% to $15.4 million in the second quarter
of 2012, compared with $9.4 million earned in the second quarter of
the prior year.
Operating results from Dundee Realty's land and housing business
were strong, with revenue increasing 85% to $113.8 million from
$61.6 million in the second quarter of the prior year, and with a
corresponding increase in contribution margins from $12.0 million
in the second quarter of 2011 to $28.5 million in the current
quarter. Real estate results in the second quarter of 2012
benefited from first year condominium sales in two of Dundee
Realty's projects in the Toronto area. Condominium sales are
dependent upon the timing of completion of development projects and
may vary significantly from period to period.
Uncertain global growth concerns in light of the ongoing Euro
zone crisis, combined with a slowing Chinese economy and
unconvincing economic figures out of the United States has eroded
market confidence. These economic concerns weighed heavily on
commodity prices in particular. Reflecting these global economic
concerns, the Corporation's portfolio of securities depreciated
substantially in the second quarter of 2012. In particular, during
the three months ended June 30, 2012, the Corporation realized a
loss of $34.0 million in respect of its portfolio of
investments.
Echoing similar concerns, Dundee Capital Markets incurred a loss
before taxes of $5.9 million in the second quarter of 2012,
compared with earnings of $4.3 million in the same quarter of the
prior year. Capital markets activities in the resource industry in
particular, a core focus for the capital markets segment, decreased
significantly in the second quarter of 2012 compared with the same
period of the prior year.
The Corporation continues to expand its portfolio of
agricultural products. In the second quarter and through its
investment in Blue Goose Capital Corporation, the Corporation
acquired a rainbow trout fish farm operating as Meeker Aquaculture
on Manitoulin Island, Ontario. Established in 1986, Meeker is
currently licensed to produce approximately 1.0 million pounds of
fish annually. Included as part of the acquisition is a fish
composting operation, the genesis of which was based on unearthing
an environmentally-friendly process for the disposal of fish
by-products. Current production of this organic compost, created by
mixing by-products from Ontario's fish and forestry industries, is
upwards of 40 tonnes per week.
ABOUT THE CORPORATION
Dundee Corporation is an independent publicly traded Canadian
asset management company. The Corporation's asset management
activities are focused in the areas of the Corporation's core
competencies and include real estate and infrastructure as well as
energy, resources and agriculture. Asset management activities are
carried out by Goodman Investment Counsel Inc. (formerly Ned
Goodman Investment Counsel Limited), a registered portfolio manager
and exempt market dealer across Canada and an investment fund
manager in the province of Ontario, and by DREAM, the asset
management division of Dundee Realty Corporation, a 70% owned
subsidiary of the Corporation. Asset management activities are
supported by the Corporation's ownership interest in Dundee Capital
Markets Inc. Dundee Capital Markets is also the asset manager of
the Corporation's flow-through limited partnership business carried
out through the "CMP", "CDR" and "Canada Dominion Resources"
brands. Dundee Corporation also owns and manages direct investments
in these core focus areas, through ownership of both publicly
listed and private companies. Real estate operations are carried
out through the Corporation's investment in Dundee Realty
Corporation, an owner, developer and manager of residential and
recreational properties in North America. Energy and resource
operations include the Corporation's ownership in Dundee Energy
Limited, an oil and natural gas company with a mandate to create
long-term value through the development of high impact energy
projects. The Corporation also holds other investments in the
resource sector, several of which are equity accounted.
Agricultural activities are carried out through a newly formed
entity, Dundee Agricultural Corporation. Dundee Agricultural
Corporation holds a 76% interest in Blue Goose Capital Corporation,
a privately owned Canadian company with a leading position in the
organic and natural beef production markets with operations in both
British Columbia and Ontario.
Contacts: Dundee Corporation Ned Goodman President and Chief
Executive Officer (416) 365-5665 Dundee Corporation Lucie Presot
Vice President and Chief Financial Officer (416) 365-5157
www.dundeecorp.com
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