CALGARY, AB, July 30, 2020 /CNW/ - Genesis Land
Development Corp. (TSX: GDC) (the "Corporation" or "Genesis")
reported its financial and operating results for the three months
("Q2") and six months ended June 30,
2020 ("YTD"). Genesis is an integrated land developer
and residential home builder operating in the Calgary Metropolitan Area ("CMA"), owning and
developing a portfolio of well-located, entitled and unentitled
residential, commercial and mixed-use lands and serviced lots in
the CMA.
Market Overview
Global economic conditions have been difficult as the COVID-19
pandemic has caused governments to shutdown large parts of the
global economy. Alberta was
particularly impacted by the sharp decline in oil prices. The
Calgary Real Estate Board ("CREB) reported significant drops in
activity in March, April and May but June
2020 recovered to near its prior year level. Importantly,
low interest rates continue to support home sales activity.
As demonstrated in the highlights below, Genesis has focused on
executing its business plan while preserving cash resources and
protecting its balance sheet:
2020 Highlights (Q2 2020 and YTD 2020):
- Genesis generated positive cash flows from operating activities
of $7.0 million ($0.17 per share - basic and diluted) in Q2 2020
and $15.2 million ($0.36 per share - basic and diluted) in YTD 2020.
Cash flows from operating activities were $7.1 million and $11.6
million for Q2 2019 and YTD 2019 respectively.
- Net earnings attributable to equity shareholders in Q2 2020
were $3.6 million ($0.09 earnings per share - basic and diluted)
compared to a net loss attributable to equity shareholders of
$0.4 million ($0.01 loss per share - basic and diluted) in Q2
2019.
- Net loss attributable to equity shareholders in YTD 2020 was
$3.7 million ($0.09 loss per share - basic and diluted)
compared to net loss attributable to equity shareholders of
$0.3 million) ($0.01 loss per share - basic and diluted) in YTD
2019. The Corporation recorded Q1 2020 write-downs of $10.0 million (2019 - $0.8
million) on a parcel of land held for development and
$0.8 million (2019 - $Nil) relating
to a townhouse project.
- YTD 2020 saw 83 new home orders compared to 74 in 2019 and
outstanding new home orders at June 30,
2020 stood at 55 compared to 49 on June 30, 2019 and 54 at December 31, 2019.
- In Q2 2020 Genesis sold 52 homes an increase of 58% and 87
residential lots an increase of 135% over Q2 2019. In YTD 2020
Genesis sold 82 homes, an increase of 39%, and 119 lots, an
increase of 70%, over YTD 2019.
- Q2 2020 lot sales to third parties were 35 compared to 4 in Q2
2019 while YTD 2020 lot sales to third parties were 37 compared to
11 in YTD 2019.
- YTD 2020 includes the sale of two development land parcels for
$9.2 million versus none in YTD
2019.
- These higher volumes generated Q2 2020 revenue of $30.7 million compared to $16.5 million in Q2 2019 bringing YTD 2020
revenues to $54.4 million compared to
$29.2 million in YTD 2019.
- On June 30, 2020, Genesis had
$24.0 million in cash and cash
equivalents and loans and credit facilities of $46.0 million which is 16% of the total book
value of assets.
Selected Financial Results and Operating Data:
|
Three months
ended
June 30,
|
Six months
ended
June 30,
|
($000s, except for
per share items or unless otherwise noted)
|
2020
|
2019
|
2020
|
2019
|
Key Financial
Data
|
|
|
|
|
Total
revenues
|
30,725
|
16,533
|
54,377
|
29,230
|
Net earnings (loss)
attributable to equity shareholders
|
3,644
|
(357)
|
(3,739)
|
(283)
|
Net earnings (loss)
per share - basic and diluted
|
0.09
|
(0.01)
|
(0.09)
|
(0.01)
|
Cash flows from
operating activities
|
7,044
|
7,061
|
15,232
|
11,644
|
Cash flows from
operating activities per share - basic and diluted
|
0.17
|
0.17
|
0.36
|
0.28
|
Key Operating
Data
|
|
|
|
|
Land
Development
|
|
|
|
|
Total residential
lots sold (units)
|
87
|
37
|
119
|
70
|
Residential lot
revenues
|
14,739
|
6,554
|
20,491
|
11,930
|
Development land
revenues
|
175
|
-
|
9,162
|
-
|
|
|
|
|
|
Home
Building
|
|
|
|
|
Homes sold
(units)
|
52
|
33
|
82
|
59
|
Revenues
(1)
|
23,901
|
15,486
|
37,989
|
26,572
|
Outstanding new home
orders at period end (units)
|
|
|
55
|
49
|
(1)
|
Includes revenues
of $8,090,000 for 52 lots in Q2 2020 and $13,265,000 for 82 lots in
YTD 2020 purchased by the Home Building division from the Land
Development division ($5,507,000 and 33 in Q2 2019; $9,272,000 and
59 in YTD 2019) and sold with the home. These amounts are
eliminated on consolidation
|
($000s, except for
per share items or unless otherwise noted)
|
|
As at Jun. 30,
2020
|
As at Dec. 31,
2019
|
Key Balance Sheet
Data
|
|
|
|
Cash and cash
equivalents
|
|
23,989
|
16,248
|
Total
assets
|
|
283,330
|
296,268
|
Loans and credit
facilities
|
|
45,954
|
51,546
|
Shareholders'
equity
|
|
203,193
|
193,957
|
Loans and credit
facilities (debt) to total assets
|
|
16%
|
17%
|
Board Chair Appointment
The Board of Directors has confirmed the appointment of
Stephen Griggs as the Board Chair
effective August 1, 2020. Mr. Griggs
has been Executive Chair of the Board since September 2018. The primary responsibility of the
Chair, as it was in the Executive Chair role, is set out in the
Chair mandate in the Corporation's Governance Policies: "provide
leadership to the Board, the Board Committees, individual Directors
and the CEO to assist them to effectively carry out their duties
and responsibilities".
Outlook
The duration and impact of the COVID-19 pandemic remains unknown
and as a result, it is not possible to reliably estimate the impact
on the financial results and condition of the Corporation in future
periods.
Genesis is committed to implementing its strategy to develop and
realize the value of its land holdings while controlling costs and
ensuring that all health and safety recommendations of regulatory
authorities are being followed and, when feasible, exceeded.
"In the face of the very significant economic slowdown due to
COVID-19 restrictions and the energy downturn, the strength and
resilience of our people and assets was demonstrated once again in
the second quarter, with solid financial results," said CEO
Iain Stewart. "I am confident we can
continue to execute on our business plan and deliver long term
value for our shareholders".
Additional Information
The information contained in this press release should be read
in conjunction with the unaudited condensed consolidated interim
financial statements for the three and six months ended
June 30, 2020 and 2019 and the
related Management's Discussion and Analysis ("MD&A") dated
July 30, 2020 which have been filed
with Canadian securities regulatory authorities. Copies of these
documents may be obtained via www.sedar.com or our website at
www.genesisland.com.
ADVISORIES
Cautionary Note Regarding Forward-Looking
Statements
This news release contains certain statements which
constitute forward-looking statements or information
("forward-looking statements") within the meaning of applicable
securities legislation, including Canadian Securities
Administrators' National Instrument 51-102 'Continuous Disclosure
Obligations', concerning the business, operations and financial
performance and condition of Genesis. Generally, these
forward-looking statements can be identified by the use of
forward-looking terminology such as "plans", "expects" or "does not
expect", "is expected", "seeks", "budget", "scheduled",
"estimates", "forecasts", "intends", "anticipates" or "does not
anticipate", or "believes", or variations of such words and phrases
or state that certain actions, events or results "may", "could",
"would", "might" or "will be taken", "occur" or "be
achieved".
Although Genesis believes that the anticipated future
results, performance or achievements expressed or implied by
forward-looking statements are based upon reasonable assumptions
and expectations, the reader should not place undue reliance on
forward-looking statements because they involve assumptions, known
and unknown risks, uncertainties and other factors many of which
are beyond the Corporation's control, which may cause the actual
results, performance or achievements of Genesis to differ
materially from anticipated future results, performance or
achievement expressed or implied by such forward-looking
statements. Accordingly, Genesis cannot give any assurance that its
expectations will in fact occur and cautions that actual results
may differ materially from those in the forward-looking
statements.
Forward-looking statements are based on material factors or
assumptions made by us with respect to, among other things,
opportunities that may or may not be pursued by us; changes in the
real estate industry; fluctuations in the Canadian and Alberta economy; changes in the number of lots
sold and homes delivered per year; and changes in laws or
regulations or the interpretation or application of those laws and
regulations. Because forward-looking statements relate to
the future, they are subject to inherent uncertainties, risks and
changes in circumstances that are difficult to predict and many of
which are outside of our control.
Forward-looking statements in this news release include, but
are not limited to plans and strategies surrounding the acquisition
of additional land; the future residential development of
land; anticipated general economic and business conditions.
Factors that could cause actual results to differ materially
from those set forth in the forward-looking statements include, but
are not limited to: the impact of contractual arrangements
and incurred obligations on future operations and liquidity; local
real estate conditions, including the development of properties in
close proximity to Genesis' properties; the uncertainties of real
estate development and acquisition activity; fluctuations in
interest rates; ability to access and raise capital on favourable
terms; not realizing on the anticipated benefits from transactions
or not realizing on such anticipated benefits within the expected
time frame; the cyclicality of the oil and gas industry; changes in
the Canadian US dollar exchange rate; labour matters; governmental
regulations; general economic and financial conditions; stock
market volatility; and other risks and factors described from time
to time in the documents filed by Genesis with the securities
regulators in Canada available at
www.sedar.com, including in the Corporation's MD&A under the
heading "Risks and Uncertainties" and the Corporation's annual
information form under the heading "Risk Factors".
Furthermore, the forward-looking statements contained in this
news release are made as of the date of this news release and,
except as required by applicable law, Genesis does not undertake
any obligation to publicly update or to revise any of the
forward-looking statements, whether as a result of new information,
future events or otherwise.
SOURCE Genesis Land Development Corp.