Funds from operations (FFO) increased 5% to
Revenue in our income-producing divisions (Investment Properties and REIT) was down 3% over Q1-2021. Excluding the Early Termination in the REIT and the IP Early Termination events in Q1-2021, revenue in these divisions was up 7% over Q1-2021.
Revenue and occupancy in our income-producing divisions have remained relatively stable. Leasing activity through the quarter has trended to positive, with 179,269 sf of new and renewed leasing (including holdovers) in the REIT leading to improved occupancy of 87.4%. Occupancy for IP was also up slightly to 77.6% for Canadian properties and 76.9% for US properties.
Golf course operations will start contributing to revenue in the second quarter."
First Quarter Results
Revenue in Q1-2022 was up 23% compared to Q1-2021 as a result of continued strength in the new homes market and the timing of lot registrations in the quarter, which contributed to the 75% increase in
Revenue from our income-generating Investment Properties and REIT divisions was down compared to Q1-2021 due to the Early Termination and IP Early Termination events (see Investment Properties, page 10 and REIT, page 10 for additional information) which contributed
FINANCIAL HIGHLIGHTS
Revenue was up 23% as a results of the 136% increase in single-family lots sold and 7.58 acres in multi-family land sales (Q1-2021 - nil), leading to 75% growth in
Funds from operations (FFO) increased 5% over Q1-2021.
Net income was
DIVISIONAL OPERATING HIGHLIGHTS
The
Sales activity remains healthy in our Canadian markets, including satellite communities such as
The Property Development team has 6,913 sf in 1 project (
Revenue in our income-producing divisions (Investment Properties and REIT) was down 3% in the quarter. This decrease is a result of the Early Termination and IP Early Termination events which both occurred in Q1-2021, coupled with reduced revenue from our US properties as 11 residential units were sold in Q2 and Q3-2021. These reductions to revenue were partially offset by increased occupancy in both
Our
RETURNING VALUE
We continue to return value to our shareholders and unitholders:
- We paid a quarterly dividend of
$0.14 per share in Q1-2022. - On
May 9, 2022 we declared a quarterly dividend of$0.14 per share, payable onJune 30, 2022 to shareholders of record onJune 15, 2022 . The dividend is an eligible dividend for Canadian tax purposes. - The REIT increased monthly distributions by 14% to
$0.04 per unit compared to Q1-2021. - The REIT also declared the following distributions for periods subsequent to the quarter:
Month | Record Date | Distribution Date | Distribution Amount |
Selected Highlights
($000s except as noted) | Three months ended | |||||
Change | ||||||
Revenue | 53,306 | 43,270 | 23.2 | % | ||
Gross margin (%)1 | 47.2 | % | 52.2 | % | (9.6)% | |
Net income | 2,470 | (14,033 | ) | 117.6 | % | |
Net margin (%)1 | 4.6 | % | (32.4)% | 114.2 | % | |
Funds from operations (FFO)2 | 10,697 | 10,174 | 5.1 | % | ||
Per Share Data ($) | ||||||
Basic earnings | 0.08 | (0.42 | ) | 119.0 | % | |
Diluted earnings | 0.07 | (0.42 | ) | 116.7 | % | |
Funds from operations3 | 0.33 | 0.31 | 6.5 | % | ||
Dividends | 0.14 | 0.10 | 40.0 | % | ||
As at ($000s except share and per share amounts) | Change | |||||
Total assets | 2,114,888 | 2,113,927 | — | % | ||
Shareholders' equity | 1,110,053 | 1,116,469 | (0.6)% | |||
Total shares outstanding | 32,832,559 | 32,961,015 | (0.4)% | |||
Per Share Data ($) | ||||||
Book value3 | 33.81 | 33.87 | (0.2)% |
- Supplementary financial measure. Refer to the Non-GAAP and Non-Standard Measures section for further information.
- Non-GAAP financial measure. Refer to the Non-GAAP and Non-Standard Measures section for further information.
- 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 ended | |||
Net income (loss) for the period | 2,470 | (14,033 | ) | |
Amortization of operating lease incentives | 1,407 | 2,011 | ||
Fair value adjustment on investment properties | 2,522 | (976 | ) | |
Depreciation on property and equipment | 156 | 178 | ||
Stock based compensation expense | 117 | 266 | ||
Non-cash finance costs | (1,472 | ) | 1,274 | |
Gain on sale of asset | — | (4 | ) | |
Deferred income taxes | (181 | ) | (184 | ) |
Fair value adjustment on REIT units | 5,678 | 21,642 | ||
FFO | 10,697 | 10,174 |
Investment Properties | |||
($000s) | Three months ended | ||
Segment Earnings | 5,112 | 6,666 | |
Fair value adjustment on investment properties | 218 | (466 | ) |
Amortization of operating lease incentives | 365 | 515 | |
Divisional FFO | 5,695 | 6,715 |
REIT | ||
($000s) | Three months ended | |
Segment Earnings | 6,513 | 10,395 |
Fair value adjustment on investment properties | 3,662 | 401 |
Amortization of operating lease incentives | 901 | 915 |
Divisional FFO | 11,076 | 11,711 |
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 140 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 2022 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:Nicole Forsythe Director, Corporate Communications Tel: 1.855.673.6931 x4707 ir@melcor.ca
Source:
2022 GlobeNewswire, Inc., source