CALGARY, AB, Nov. 5, 2020 /CNW/ - Genesis Land Development
Corp. (TSX: GDC) (the "Corporation" or "Genesis") reported its
financial and operating results for the three months ("Q3") and
nine months ended September 30, 2020
("YTD"). Genesis is an integrated land developer and
residential home builder operating in the Calgary Metropolitan Area ("CMA"), owning and
developing a growing portfolio of well-located, entitled and
unentitled residential, commercial and mixed-use lands and serviced
lots in the CMA.
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 (Q3 2020 and YTD 2020):
- Positive Cash Flow from Operations Up Significantly:
Genesis generated positive cash flows from operating activities of
$9.9 million ($0.24 per share - basic and diluted) in Q3 2020
and $25.1 million ($0.60 per share - basic and diluted) in YTD 2020.
This is a significant improvement from the same periods in 2019, in
which cash flows used in operating activities were ($10.1 million) (($0.24) per share - basic and diluted) for Q3
2019, while cash flows generated from operating activities were
$1.6 million ($0.04 per share - basic and diluted) for YTD
2019.
- Net Earnings Increased: Net earnings attributable to
equity shareholders in Q3 2020 were $3.8
million ($0.09 earnings per
share - basic and diluted) compared to $0.3
million ($0.01 earnings per
share - basic and diluted) in Q3 2019. Net earnings attributable to
equity shareholders in YTD 2020 were $0.07
million ($0.00 earnings per
share - basic and diluted), compared to $0.02 million ($0.00 earnings per share - basic and diluted) in
YTD 2019. In Q1 2020 the Corporation recorded 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.
- Significant Increase in Homes Sold and New Home Orders:
In Q3 2020, Genesis sold 53 homes, an increase of 104% from the 26
sold in Q3 2019. In YTD 2020, Genesis sold 135 homes, an increase
of 59% from the 85 sold YTD 2019. At September 30, 2020, Genesis had 138 new home
orders compared to 112 at September 30,
2019. Genesis had 57 outstanding new home orders at
September 30, 2020 (61 on
September 30, 2019 and 54 at
December 31, 2019).
- Lot Sales Up: In Q3 2020, Genesis sold 76 residential
lots (23 to third-party builders and 53 through Genesis' home
building division) an increase of 182% from 27 lots in Q3 2019 (one
to a third-party builder and 26 through its home building
division). In YTD 2020, Genesis sold 195 residential lots (60 to
third-party builders and 135 through its home building division),
an increase of 101% from 97 lots in YTD 2019 (12 to third-party
builders and 85 through its home building division).
- $9.5 Million of Development
Land Sales: YTD 2020, Genesis has sold three development land
parcels for $9.5 million versus none
in YTD 2019.
- Revenues up 132% in Q3 2020: These higher sales volumes
in all areas generated Q3 2020 revenue of $29.7 million, compared to $12.8 million in Q3 2019 and YTD 2020 revenues of
$84.1 million, compared to
$42.0 million in YTD 2019.
- $30.7 Million of Cash and Net
Debt of $13.7 Million: On
September 30, 2020, Genesis had
$30.7 million in cash and cash
equivalents, and outstanding loans and credit facilities of
$44.4 million (15% of the total book
value of its assets).
Selected Financial Results and Operating Data:
|
|
|
Three months
ended
September 30,
|
Nine months
ended
September 30,
|
($000s, except for
per share items or unless otherwise noted)
|
2020
|
2019
|
2020
|
2019
|
Key Financial
Data
|
|
|
|
|
|
Total
revenues
|
|
|
29,739
|
12,786
|
84,116
|
42,016
|
Net earnings
attributable to equity shareholders
|
3,813
|
300
|
74
|
17
|
Net earnings per
share - basic and diluted
|
0.09
|
0.01
|
0.00
|
0.00
|
Cash flows from (used
in) operating activities
|
9,893
|
(10,076)
|
25,125
|
1,568
|
Cash flows from (used
in) operating activities per share - basic
and diluted
|
0.24
|
(0.24)
|
0.60
|
0.04
|
Key Operating
Data
|
|
|
|
|
Land
Development
|
|
|
|
|
Total residential
lots sold (units)
|
76
|
27
|
195
|
97
|
Residential lot
revenues
|
13,926
|
4,911
|
34,417
|
16,841
|
Development land
revenues
|
320
|
-
|
9,482
|
-
|
|
|
|
|
|
Home
Building
|
|
|
|
|
Homes sold
(units)
|
53
|
26
|
135
|
85
|
Revenues
(1)
|
24,838
|
12,623
|
62,827
|
39,195
|
Outstanding new home
orders at period end (units)
|
|
|
57
|
61
|
(1)
|
Includes revenues
of $9,345,000 for 53 lots in Q3 2020 and $22,610,000 for 135 lots
in YTD 2020 purchased by the Home Building division from the Land
Development division ($4,748,000 and 26 in Q3 2019; $14,020,000 and
85 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 Sept.
30,
2020
|
As at Dec. 31,
2019
|
Key Balance Sheet
Data
|
|
|
|
|
Cash and cash
equivalents
|
|
|
30,719
|
16,248
|
Total
assets
|
|
|
287,055
|
296,268
|
Loans and credit
facilities
|
|
|
44,383
|
51,546
|
Shareholders'
equity
|
|
|
193,952
|
193,957
|
Loans and credit
facilities (debt) to total assets
|
|
|
15%
|
17%
|
Development approvals delayed
On November 3, 2020, Calgary City
Council did not approve applications for removal of Growth
Management Overlays ("GMOs") from 11 proposed projects belonging to
various land developers, of which 2 projects belonged to Genesis,
namely Ricardo Ranch and Lewiston.
GMOs are required to be removed prior to receiving final
development approvals. The two Genesis projects met or exceeded, to
the best of Genesis' understanding, all pre-identified criteria for
removal of their respective GMOs. Genesis intended to commence
development of these two projects in 2021. Genesis will give a high
priority to reapplying for removal of the GMOs at the earliest
opportunity.
Outlook
The Calgary Metropolitan Area
economy has seen materially lower economic activity and increased
unemployment levels due to the COVID-19 pandemic and low energy
prices. While the Calgary economy
improved in the third quarter, the duration and impact of the
COVID-19 pandemic and the impact of lower energy prices remain
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 continues to adapt its operations, capital investments
and marketing approaches to address current conditions and has seen
positive results from these activities. These positive results
include significant increases in the volumes of new home orders and
sales of houses, lots and development lands. These higher volumes
generated significant cash flows from operating activities of
$25.1 million for YTD 2020. "The
strength and resilience of our people and assets shows in the
strong results produced through September
30 for 2020," said CEO Iain
Stewart. "I am confident we can continue to execute on our
business plan and deliver long term value for our shareholders
despite current economic challenges."
Genesis is committed to implementing its strategy to develop and
realize the value of its land holdings, while prudently managing
its financial and other resources with a focus on controlling
costs, preserving cash, protecting the value of its assets and
limiting financing risk while ensuring that all health and safety
recommendations of regulatory authorities are being followed and,
when feasible, exceeded.
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 nine months ended
September 30, 2020 and 2019 and the
related Management's Discussion and Analysis ("MD&A") dated
November 5, 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.