Dundee Corporation Reports 2011 Financial Results
March 26 2012 - 9:22PM
Marketwired
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 year ended December 31, 2011. The Corporation's audited
annual consolidated financial statements, along with management's
discussion and analysis and annual information form 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.dundeecorporation.com.
FINANCIAL HIGHLIGHTS
-- Net Earnings attributable to equity holders in 2011 were $1.0 billion or
$15.10 per share on a fully diluted basis. This compares with net
earnings of $201 million in 2010 or $2.56 per share on a fully diluted
basis. Net earnings in 2011 included a gain of $870.8 million from the
Corporation's divestment of its interest in DundeeWealth, which was
completed during the first quarter of 2011.
-- Net Earnings from Continuing Operations attributable to equity holders
for the year ended December 31, 2011 were $173.2 million or $2.17 per
share on a fully diluted basis. This compares to net earnings from
continuing operations attributable to equity holders of $199.3 million
or $2.05 per share on a fully diluted basis, earned in the prior year.
Current year per share amounts reflect the impact of the Corporation's
substantial issuer bid and subsequent cancellation of 10 million Class A
subordinate voting shares, which was completed in the fourth quarter of
2011.
-- Gain on Sale of Breakwater Resources Ltd. - Included in the 2011
earnings is a pre-tax gain of $95.6 million ($71.1 million after tax)
from the Corporation's divestment of Breakwater.
-- Market Value of Investments - The market value of the Corporation's
portfolio of investments was $1.5 billion at December 31, 2011, and
includes shares of The Bank of Nova Scotia received by the Corporation
on its divestment of DundeeWealth Inc. Amidst concerns of a global
economic downturn and the impact on financial markets generally, during
2011, the Corporation's portfolio of available-for- sale securities
depreciated by $181.7 million, including $106.3 million relating to the
Corporation's interest in Scotiabank received in consideration for its
divestment of DundeeWealth.
-- Equity Accounted Investments - Earnings from equity accounted
investments were $61.8 million in 2011 compared with $75.4 million in
the prior year. At December 31, 2011, the market value of these equity
accounted investments was $617.0 million.
-- Fee Earning Assets under Management and Administration increased to
$12.3 billion at December 31, 2011, compared with $10.4 billion at
December 31, 2010.
-- Corporate Debt at December 31, 2011 was $546.6 million and included
$269.6 million borrowed in our real estate and resource based
subsidiaries.
STRATEGIC DEVELOPMENTS IN THE FOURTH QUARTER OF 2011
Substantial Issuer Bid
During the fourth quarter, the Corporation launched a
substantial issuer bid to purchase for cancellation up to 10
million of its Class A subordinate shares for $23.75 per share or
$237.5 million in aggregate. The Corporation took up and paid for
10 million of the Class A Subordinate Shares representing
approximately 16.2% of the Class A Subordinate Shares issued and
outstanding immediately prior to completion of the transaction. The
Corporation funded the purchase price using working capital
provided through its established credit facilities as well as the
sale of certain of its portfolio investments.
Expansion in the Agricultural Sector
The Corporation recently established Dundee Agricultural
Corporation, a wholly owned subsidiary, to focus on sustainable
agricultural investment opportunities across Canada and globally.
In December 2011, Dundee Agricultural made its first anchor
investment through the acquisition of an 81% interest in Blue Goose
Capital Corporation, the parent company to Blue Goose Cattle
Company, a leading operator in the organic and natural beef
production market. Blue Goose has operations in both British
Columbia and Ontario.
Acquisition of Dundee Capital Markets Inc.
Subsequent to December 31, 2011, the Corporation completed the
acquisition of all of Dundee Capital Markets' outstanding common
shares not already held by the Corporation at a price of $1.125 per
share by way of a court approved plan of arrangement under the
Business Corporations Act (Ontario). The Corporation paid $88.0
million in respect of the transaction. The transaction was
completed in February 2012 and the Corporation currently owns all
of the common shares of Dundee Capital Markets.
2011 SEGMENTED RESULTS OF OPERATIONS
(in millions of dollars)
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For the years ended December 31, 2011 2010
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Net earnings (loss) before income taxes from:
Real estate segment $ 98.6 $ 122.1
Resource segment 123.5 50.0
Agriculture segment (0.7) -
Asset management segment (7.1) 38.8
Capital markets segment 9.9 49.8
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224.2 260.7
Income taxes (51.0) (61.4)
Discontinued operations 850.8 84.5
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Net earnings for the year $ 1,024.0 $ 283.8
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Net earnings attributable to:
Owners of the parent 1,014.6 201.1
Non-controlling interest 9.4 82.7
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$ 1,024.0 $ 283.8
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The Corporation's real estate segment generated net earnings
before income taxes of $98.6 million during 2011 compared with
$122.1 million earned in the prior year. Lower earnings in 2011
were in line with expectations for the year, as Dundee Realty had
expected a drop in demand and adjusted development activity
accordingly. The Corporation's share of earnings from its
investments in Dundee REIT and Dundee International REIT was $25.8
million in aggregate compared with $18.3 million in the prior year,
and included the Corporation's share of net gains from changes in
fair values of the portfolio of investment properties held by these
entities.
During 2011, the resource segment generated net earnings of
$123.5 million compared with net earnings of $50.0 million in the
same period of the prior year. Net earnings in 2011 included a gain
on the divestment of Breakwater of $95.6 million and a full year of
operations on the oil and gas assets in southern Ontario acquired
by Dundee Energy in June 2010. Equity earnings from resource based
investments were $34.6 million in 2011 compared with $56.5 million
earned in the prior year.
At December 31, 2011, fee earning assets under management and
administration had increased to $12.3 billion, an 18% increase over
$10.4 billion in fee earning assets under management and
administration at the end of the prior year. Despite the increase,
management fee revenue decreased to $33.0 million in 2011 compared
with $48.3 million in the prior year. Prior year management fees
included $23.1 million of performance fee revenue. Reflecting the
substantial volatility in financial markets, there were no
performance fees earned by the Corporation in 2011.
The Corporation's asset management segment includes the
Corporation's direct investment holdings and related profitability.
During 2011, the Corporation realized losses of $23.5 million from
these direct investments, including fair value impairments of $23.3
million. This resulted in net losses for the asset management
segment of $7.1 million in 2011. This compares with realized
earnings from these investments of $29.9 million in the prior year,
resulting in net earnings of $38.8 million.
Dundee Capital Markets generated earnings before taxes of $9.9
million in 2011, a substantial decline when compared with earnings
of $49.8 million in the prior year. The decline in net earnings
reflects the challenging financial markets and business conditions
that persisted globally during the latter part of 2011, and the
related impact to Dundee Capital Markets, including lower returns
generated on managed products and a significant decrease in
profitability from principal trading activity.
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 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 (formerly Eurogas Corporation), 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 several other equity accounted investments in the resource
sector. Agricultural activities are carried out through a newly
formed entity, Dundee Agricultural Corporation. Dundee Agricultural
Corporation acquired an 81% 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
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