Mr. Robert Courteau reports

ALTUS GROUP REPORTS SECOND QUARTER 2016 FINANCIAL RESULTS

Altus Group Ltd. has released its financial and operating results for the second quarter ended June 30, 2016.

Second quarter 2016 highlights:

• Altus analytics total revenues increased 18.6 per cent, and adjusted earnings before interest, taxes, depreciation and amortization increased 24.0 per cent.
  • Recurring revenues increased 30.0 per cent.
• CRE consulting total revenues increased 10.0 per cent, and adjusted EBITDA increased 28.1 per cent.
  • Property tax continued to solidify its market leadership position with revenues increasing 10.6 per cent, and adjusted EBITDA increased 21.4 per cent.
  • Valuation and cost advisory revenues increased 9.1 per cent, and adjusted EBITDA increased 66.3 per cent.
• Consolidated revenues increased 5.0 per cent to $110.0-million.
• Consolidated adjusted EBITDA increased 11.3 per cent to $18.3-million.
• Geomatics impacted overall results with a decline of 39.7 per cent in revenues and 147.8 per cent in adjusted EBITDA as a result of reduced activity in the oil and gas sector.

"Our core business segments, Altus analytics and CRE consulting, continued to demonstrate robust top-line growth and adjusted EBITDA margin performance, both contributing to another strong quarter despite the ongoing softness in geomatics," said Robert Courteau, chief executive officer at Altus Group. "Our best-in-class technology offering continues to gain further traction and momentum with many of the largest players in the CRE marketplace, while our consulting services continue to be market leaders in their respective fields of expertise."

Second quarter 2016 review

Altus analytics benefited from an 18.6-per-cent increase in revenues driven by a 30.0-per-cent increase in recurring revenues for Argus Enterprise, Voyanta and data products subscriptions, as well as from appraisal management and maintenance revenues. The decline in non-recurring revenues of 7.6 per cent was primarily a result of fewer transactional due diligence assignments. In addition, improvements in the exchange rate against the Canadian dollar benefited revenues by 3.3 per cent. The improvement to adjusted EBITDA of 24.0 per cent was the result of higher revenues and cost savings from restructuring activities. Changes in foreign exchange benefited adjusted EBITDA by 4.1 per cent.

Commercial real estate (CRE) consulting revenues increased 10.0 per cent to $64.3-million when compared with the second quarter of 2015. CRE consulting generated broad-based growth with property tax revenues up 10.6 per cent while valuation and cost advisory revenues increased 9.1 per cent. The increase in property tax revenues was driven by strong organic growth in Canada and the United States. The company's valuation and cost advisory practices continued to benefit from revenue diversification in key geographical markets. Exchange rates benefited revenues by 0.8 per cent. Adjusted EBITDA increased 28.1 per cent to $17.2-million, as a result of strong revenue growth across CRE consulting practices.

Geomatics continued to be adversely impacted by the low price of oil and reduced activity in the oil and gas sector resulting in revenues decreasing by 39.7 per cent to $9.6-million. Adjusted EBITDA was a loss of $1.0-million, down 147.8 per cent, as compared with the same period in 2015, driven by reduced revenues. In addition, during the quarter, forest fires in the Fort McMurray area and heightened attention to forest fire hazards across Northern Alberta shut down a number of work areas for several weeks.

Corporate costs (recovery) were $7.7-million for the quarter ended June 30, 2016, as compared with $7.1-million in the same period in 2015. The increase in corporate costs was due to higher variable compensation.

During the second quarter of 2016, on a consolidated basis, favourable exchange rates against the Canadian dollar benefited consolidated revenues by 1.4 per cent.

Under international financial reporting standard accounting, profit (loss) for the second quarter of 2016, was $12.7-million and 34 cents per share, basic and diluted, compared with $2.7-million and eight cents per share, basic and diluted, during the same period in 2015.

At the end of the second quarter, Altus Group's balance sheet remained strong, with bank debt at $120.0-million, representing a leverage ratio of financed debt to EBITDA of 1.78 times.

Second quarter 2016 results conference call and webcast

Date:  Aug. 11, 2016

Time:  5 p.m. (ET)

Webcast:  at the Altus Group website (under the investors tab)

Live call:  1-866-223-7781 (toll-free) or 416-340-2216 (Toronto area)

Replay:  a replay of the call will be available through the webcast at Altus Group website

      INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)       
           (expressed in thousands of dollars, except per-share amounts)   
   
                                       Three months ended         Six months ended
                                            June 30,                  June 30,
                                        2016         2015         2016         2015

Revenues                           $ 109,970    $ 104,753    $ 216,658    $ 203,218
                                     -------      -------      -------      -------
Expenses
Employee compensation                 67,869       66,245      138,782      130,548
Occupancy                              4,944        4,217       10,160        8,482
Office and other operating            20,704       18,919       40,961       35,848
Amortization of intangibles            6,585        8,796       13,730       16,976
Depreciation of property, plant
and equipment                          1,735        1,716        3,502        3,224
Acquisition-related expenses
(income)                                (395)         324         (234)         324
Share of (profit) loss of
associates                               174          790        1,286          824
Restructuring costs                    1,371        1,200        3,081        1,200
(Gain) loss on sale of certain
business assets                       (9,935)      (3,483)      (9,935)      (3,483)
                                     -------      -------      -------      -------
Operating profit (loss)               16,918        6,029       15,325        9,275
                                     -------      -------      -------      -------
Finance costs (income), net            1,205        3,473        2,930        6,130
                                     -------      -------      -------      -------
Profit (loss) before income
taxes                                 15,713        2,556       12,395        3,145
                                     -------      -------      -------      -------
Income tax expense (recovery)          3,054         (138)       1,948         (265)
                                     -------      -------      -------      -------
Profit (loss) for the period
attributable to equity holders     $  12,659    $   2,694    $  10,447    $   3,410
                                     -------      -------      -------      -------
Other comprehensive income
(loss)
Items that may be reclassified
to profit or (loss)
in subsequent
periods
Cash flow hedges                           -          228            -          320
Currency translation
differences                           (2,142)      (2,219)     (17,832)      14,708
Share of other comprehensive
income (loss) of associates             (339)         658       (1,048)       1,000
                                     -------      -------      -------      -------
Other comprehensive income
(loss), net of tax                    (2,481)      (1,333)     (18,880)      16,028
                                     -------      -------      -------      -------
Total comprehensive income
(loss) for the period, net of
tax, attributable to equity
holders                            $  10,178    $   1,361    $  (8,433)   $  19,438
                                     =======      =======      =======      =======
Earnings (loss) per share
attributable to the equity
holders of the company during
the period
Basic earnings (loss) per share        $0.34        $0.08        $0.28        $0.11
Diluted earnings (loss) per
share                                  $0.34        $0.08        $0.28        $0.10
                                     =======      =======      =======      =======

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