MRD Melcor Developments Ltd

Melcor Developments Ltd.  (TSX:MRD), an Alberta-based real estate development
company, today reported strong results for the quarter ended June 30, 2013.
Revenue increased by 45% to $50.74 million in the second quarter compared to
Q2-12 and by 35% to $92.35 million year-to-date. Melcor earned net income of
$10.21 million or $0.34 per share (basic) in Q2-13, a decrease of 46% over
Q2-12. Year-to-date net income was $22.83 million, a decrease of 8% over the
first six months of 2012. The decline in net income is the result of one-time
costs relating to the formation of Melcor REIT.


Adjusted earnings, which excludes REIT transaction costs and unitholders'
portion of earnings of the REIT, was $20.57 million in the second quarter, an
increase of 9% over Q2-12, and $33.19 million year-to-date, an increase of 34%.
Management believes that adjusted earnings provides a clearer measure of
operational and relative performance.


Funds from operations (FFO) was $0.21 per share in Q2-13 compared to $0.24 per
share in Q2-12. Year- to-date FFO was $0.51 per share compared to $0.44 per
share in the first six months of 2012. FFO per share adjusts for certain
non-cash earnings items included in income such as fair value adjustments on
investment properties, fair value adjustments on REIT units and stock based
compensation expense.


Brian Baker, Melcor's President and Chief Executive Officer commented on the
quarter: "We are pleased to report strong growth in revenue, adjusted earnings
and gross margin stability. All operating divisions are performing well and
we've had a productive construction season to date. With strong leadership in
all divisions and a strategic supply of short- and long-term development assets,
we remain well positioned for continued growth and success."


Second Quarter Highlights



--  Melcor achieved solid results in the first half of 2013: 
    --  Consolidated revenues of $50.74 million, up 45%; year-to-date
        revenues of $92.35 million, up 35% 
    --  Adjusted basic earnings per share of $0.68 in the quarter and $1.10
        year-to-date compared to $0.63 and $0.82 respectively in 2012. Basic
        earnings per share were $0.34 in the quarter and $0.75 year to date.
        Net income and earning per share were impacted by the formation of
        Melcor REIT. Adjusted earnings per share provide a clearer measure
        of operational and relative performance than basic earnings per
        share as a result. 
    --  FFO of $0.21 per share in the quarter, down 13%; year-to-date FFO of
        $0.51, up 16% 
--  On May 1stwe formed Melcor REIT through an initial public offering which
    raised gross proceeds of $83.00 million and on May 10th, 2013 the
    underwriters exercised, in full, their over-allotment option for gross
    proceeds of $8.30 million. 
--  We declared and paid $7.66 million in semi-annual dividends and $15.33
    million in special dividends. 
--  Revenues were higher across all divisions in Q2-13 as a result of
    increased activity and continued execution of Melcor's growth strategy. 
    --  The Community Development division sold 197 single-family lots (Q2-
        12: 149), sold 7.37 acres for multi-family projects (Q2-12: 2.47)
        and 5.11 acres for commercial and industrial use (Q2-12: 5.96). This
        resulted in revenue growth of 49% to $32.19 million. 
    --  The Property Development division completed construction on 4
        buildings in Q2-13 and recognized $1.43 million in fair value gains.
        This compares to fair value gains of $1.06 million in Q2-12. 
    --  Leasing activity in the Investment Properties division was strong
        with portfolio-wide occupancy rates rising to 96% compared to 86% in
        Q2-12. This increase is a result of new leasing activity on two
        commercial properties as well as the assets transferred from our
        Property Development division in the last fiscal year at 100%
        occupancy. Funds from operations grew 53% to $2.77 million in Q2-13.
    --  Leasing activity in the properties owned by Melcor REIT was also
        strong, with rental revenue increasing 9% over Q2-12 as a result of
        increases in base rents and higher average occupancy in the quarter.
--  Subsequent to the quarter, Brian Baker assumed the role of Chief
    Executive Officer of Melcor Developments Ltd. 



Outlook

The majority of Melcor's business operations and assets remain focused on
Alberta. Alberta economic fundamentals remain strong, with low unemployment
rates, net in-migration, higher than the national average weekly earnings,
strong capital investment, stabilizing inflation and relative stability in the
price of oil. These fundamentals create a favorable environment for both
residential and commercial property development.


The company continues its selective US expansion by increasing its stable of
residential rental properties, serviced lot inventory and raw development land.
These assets now comprise approximately 10% of the company's total assets in a
strengthening real estate market. With Melcor's inventory of raw and developed
land, financial resources and strong management group, the company is well
positioned to take advantage of market opportunities.


MD&A and Financial Statements

Melcor's consolidated financial statements and management's discussion and
analysis for the three- and six-months ended June 30, 2013 can be found on the
company's website at www.Melcor.ca or on SEDAR (www.sedar.com).


About Melcor Developments Ltd.

Melcor is a diversified real estate development and management company with a
rich heritage of integrity and innovation in real estate since 1923.


Through four integrated operating divisions, Melcor manages the full life cycle
of real estate development: from acquiring raw land, to community planning, to
construction and development, to managing leasable office, retail and
residential sites. The company develops and manages mixed-use residential
communities, business and industrial parks, office buildings, retail commercial
centres and golf courses.


Melcor's headquarters are located in Edmonton, Alberta, with regional offices
throughout Alberta and British Columbia. Company developments span western
Canada and the US. 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 2013 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.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Melcor Developments Ltd.
Brian Baker
Chief Executive Officer
780.423.6931
info@melcor.ca


Melcor Developments Ltd.
Jonathan Chia, CA
Chief Financial Officer
780.423.6931
ir@melcor.ca

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