EDMONTON, Alberta, May 08, 2018 (GLOBE NEWSWIRE) -- Melcor Developments Ltd. (TSX:MRD), an Alberta-based real estate development and asset management company, today reported results for the quarter ended March 31, 2018. Revenue for the quarter was $44.41 million, up 15% over Q1-2017. Revenue growth was driven by an increase in sales in the Community Development division which led to a 54% increase in divisional revenue coupled with stable results in our income-producing divisions.
Net income for the quarter was $14.65 million or $0.44 per share (basic) compared with a net loss of $9.00 million or $0.27 per share (basic) in the same period of 2017. Net income is impacted by non-cash fair value adjustments on investment properties on investment properties and on REIT units. Funds from operations (FFO) was was $4.92 million or $0.15 per share compared with
$6.08 million or $0.18 per share in the same period of 2017. The decrease compared with last year is primarily due to current taxes payable resulting from the sale of assets to Melcor REIT. FFO eliminates the elements that have no cash impact on our business from net income and management believes FFO better reflects Melcor's true operating performance.
Darin Rayburn, Melcor’s President and Chief Executive Officer, commented on the quarter: “We are encouraged by our first quarter results in spite of continued economic uncertainty. Multi-family and commercial land activity in the quarter drove revenue growth. In addition, strategic investments made in residential land in the US have begun to bear fruit with the sale of 154 single-family lots in Arizona in the quarter contributing to both revenue growth and gross margin improvements.
The performance of our income-producing portfolio remained steady in the quarter and we continued to execute our strategy of monetizing the value created by our property development team with the sale of 5 assets from Melcor Developments to the Melcor REIT for $80.88 million. With a strong balance sheet and high quality assets and raw land inventory, we remain well-positioned for 2018 and beyond."
The Board today declared a quarterly dividend of $0.13 per share, payable on June 29, 2018 to shareholders of record on June 15, 2018. The dividend is an eligible dividend for Canadian tax purposes.
First Quarter Results
Our Community Development and Property Development divisions are actively engaged in a number of projects as we enter the 2018 construction season. Our Property Development team transferred 35,365 sf in GLA to our Investment Properties division during the quarter and has a further 93,500 sf of commercial properties currently under construction.
Highlights of the first quarter include:
Selected Highlights
| ($000s except as noted) | Three months ended | ||||||
| 31-Mar-18 | 31-Mar-17 | Change | |||||
| Revenue | 44,414 | 38,567 | 15.2 | % | |||
| Gross margin (%) * | 51.7 | % | 48.6 | % | 3.1 | % | |
| Net income (loss) | 14,647 | (9,003 | ) | 262.7 | % | ||
| Net margin (%) * | 33.0 | % | (23.3 | )% | 56.3 | % | |
| Funds from operations * | 4,920 | 6,078 | (19.1 | )% | |||
| Per Share Data ($) | |||||||
| Basic earnings (loss) | 0.44 | (0.27 | ) | 263.0 | % | ||
| Diluted earnings | 0.44 | (0.27 | ) | 263.0 | % | ||
| Funds from operations * | 0.15 | 0.18 | (16.7 | )% | |||
| As at ($000s except as noted) | 31-Mar-18 | 31-Dec-17 | Change | |
| Shareholders' equity | 1,022,867 | 1,008,590 | 1.4 | % |
| Total assets | 1,955,845 | 1,990,983 | (1.8 | )% |
| Per Share Data ($) | ||||
| Book value * | 30.63 | 30.21 | 1.4 | % |
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 March 31, 2018, which can be found on the company’s website at www.Melcor.ca or on SEDAR (www.sedar.com).
Annual General & Special Meeting
Shareholders and interested parties are invited to join us at our Annual General & Special Meeting on Thursday, May 10, 2018 at 11:00 AM MT. The AGM will also be webcast (listen only) at http://www.gowebcasting.com/9248.
About Melcor Developments Ltd.
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 Alberta, Saskatchewan, British Columbia, Arizona and Colorado.
Melcor has been focused on real estate since 1923. The company has built over 140 communities and commercial projects across Western Canada and today manages 3.93 million sf in commercial real estate assets and 609 residential rental units. Melcor is committed to building communities that enrich quality of life - communities where people live, work, shop and play.
Melcor’s headquarters are located in Edmonton, Alberta, with regional offices throughout Alberta and in Kelowna, British Columbia and Phoenix, Arizona. Melcor has been a public company since 1968 and trades on the Toronto Stock Exchange (TSX:MRD).
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 2018 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.
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