Mr. Iain Stewart reports
GENESIS REPORTS STRONG Q4 AND 2020 PERFORMANCE
Genesis Land Development Corp. released its fourth quarter and 2020 earnings today.
The integrated land developer and residential home builder reported $103.9-million of revenue for the 12 months ended Dec. 31, 2020, up 53 per cent year over year. Home sales, new home orders and the sale of residential lots were all up year over year, with cash flow from operating activities of $48.0-million, or $1.14 per share. Genesis declared a dividend to shareholders of 15 cents per share, which was announced in the fourth quarter of 2020 and paid in January, 2021.
"Like the communities we build which last for generations, Genesis operates its businesses for long-term success and strength," says Iain Stewart, president and chief executive officer of the Calgary-based developer. "In a very challenging year, we were able to pay a 15-cent dividend to shareholders, and deliver positive net earnings for the 20th consecutive year," he said.
2020 and Q4 results and highlights
Genesis continued in 2020 to execute its business plan while preserving cash resources and protecting its balance sheet:
$48.0 million of cash flows from operating activities: Genesis generated cash flows from operating activities of $48.0-million, or $1.14 per share (basic and diluted) in 2020, up from $9.5-million, or 23 cents per share (basic and diluted) in 2019. In Q4 2020, cash flows from operating activities was $22.9-million, or 54 cents per share (basic and diluted), up from $8.0-million, or 19 cents per share (basic and diluted) in Q4 2019.
$103.9-million of revenues in 2020:
Higher sales volumes generated revenue of $103.9-million in the year ended 2020 up from $68.1-million in 2019. Q4 2020 generated revenues of $19.8-million, down from $26.1-million in the same period in 2019.
Net earnings were positive for the 20th consecutive year:
Net earnings attributable to equity shareholders in 2020 were $200,000 or zero-cent net earnings per share (basic and diluted), compared with $1.7-million, or four-cent net earnings per share (basic and diluted) in 2019. Net earnings attributable to equity shareholders in Q4 2020 were $100,000 or zero-cent net earnings per share (basic and diluted) compared with $1.7-million, or four-cent net earnings per share -- (basic and diluted) in Q4 2019. Earnings were negatively impacted by writedowns on land parcels and a townhouse project of $11.6-million during 2020, compared with writedowns of $800,000 in 2019.
163 homes sold, up 27 per cent from 2019:
During 2020, Genesis sold 163 homes, an increase of 27 per cent from the 128 sold in 2019. In Q4 2020, Genesis sold 28 homes, compared with 43 sold in Q4 2019. During 2020, Genesis had 192 new home orders compared with 148 in 2019. Genesis had 83 outstanding new home orders at Dec. 31, 2020 (54 at Dec. 31, 2019).
225 lots sold, up 40 per cent from 2019:
In 2020, Genesis sold 225 residential lots (62 to third party builders and 163 through its home building division), up 40 per cent from 161 lots in 2019 (33 to third party builders and 128 through its home building division). In Q4 2020, Genesis sold 30 residential lots (two sold to third party builders and 28 through its home building division) compared with 64 lots in Q4 2019 (21 to a third party builder and 43 through its home building division). Genesis has fully serviced land at Dec. 31, 2020, consisting of 249 single-family lots, 82 townhouse units and five land parcels in its core communities in Airdrie and Calgary.
$16.6-million of development land sales:
In 2020, Genesis sold five development land parcels for $16.6-million, two of which were sold in Q4 2020 for $7.1-million. This compares with one parcel sold in Q4 2019 for $600,000, which was owned by a limited partnership.
Cash on hand of $29.7-million:
As at Dec. 31, 2020, Genesis had $29.7-million in cash and cash equivalents, which exceeded outstanding loans and credit facilities balances of $21.5-million by $8.2-million.
Dividend declared in Q4 2020:
A dividend of 15 cents per share totalling $6.3-million was declared in December, 2020, and paid in January, 2021. Dividends are a key component of Genesis's strategic and business plan and will continue to be a priority in the allocation of cash resources.
$50-million corporate revolving line of credit:
Subsequent to Dec. 31, 2020, Genesis finalized a $50-million three-year fixed term secured corporate revolving line of credit with MCAP Financial Corp. at an interest rate per annum equal to the higher of prime plus 1.90 per cent or 4.35 per cent.
$29.2-million land acquisition:
Subsequent to Dec. 31, 2020, Genesis entered into a binding agreement to acquire approximately 157 acres of future residential development land in the city of Calgary. Genesis paid a non-refundable deposit of $2.2-million, with the balance of $27.0-million to be paid on closing, currently scheduled for April, 2022. Upon completion, the community is expected to yield over 1,200 housing units.
The Calgary Metropolitan Area economy has experienced materially lower economic activity and increased unemployment levels due to the COVID-19 pandemic and volatility in energy prices. While the Calgary economy improved in the fourth quarter of 2020, the duration and impact of the COVID-19 pandemic remains 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. The Calgary Real Estate Board forecast that the momentum seen in the housing market in the second half of 2020 will continue into 2021, fuelled by low mortgage interest rates, low levels of housing supply and increased demand for suburban single-family homes. Alberta GDP is forecast to be positive in 2021 by RBC Economics growing by 4.5 per cent. These are both positive signs, but in addition to the continuing potential impact of COVID there are still challenges that could have a negative impact including lower immigration and higher than historical unemployment levels.
Genesis has been able to adapt its operations, capital investments and marketing approaches to address current conditions and had positive results from these activities in 2020. Genesis is continuing to focus on managing 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.
In 2021, to add to the inventory of serviced lots and parcels in Bayside, Bayview, Sage Meadows and Saddlestone, Genesis will be bringing on additional inventory in the first phase of its Sage Hill community and is planning the development of the next phases in Sage Hill, Bayside and Bayview, which will deliver additional lots and parcels in 2022 and 2023. Genesis will be looking to make progress in 2021 to obtain zoning and servicing approvals in its Lewiston, Logan Landing and OMNI developments.
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 and controlling costs.
Genesis annual meeting
Genesis will hold its annual general meeting on May 14, 2021, at 9 a.m. MT. As a result of continuing provincial COVID-19 limitations and restrictions on in-person indoor gatherings, the company's meeting will be held as a virtual-only shareholders meeting. If the provincial COVID-19 limitations and restrictions on in-person indoor gatherings are modified or removed such that an in-person meeting of Genesis shareholders would be permitted, Genesis may determine to convene the meeting as an in-person shareholders meeting rather than a virtual-only shareholders meeting. Any decision in this regard will be publicly announced by Genesis prior to the meeting.
Land Development Corp.
Genesis is an integrated land developer and residential home builder owning and developing a growing portfolio of well-located, entitled and unentitled residential, commercial and mixed-use lands, and serviced lots throughout the Calgary Metropolitan Area.
The information contained in this press release should be read in conjunction with the consolidated financial statements for the years ended Dec. 31, 2020, and 2019, and the related management's discussion and analysis (MD&A) dated March 1, 2021, which have been filed with Canadian securities regulatory authorities. Copies of these documents may be obtained via SEDAR or the company's website.
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