Business
Melcor Developments Ltd., (TSX:MRD) Second Quarter Results On Par With 2008
EDMONTON, July 30 /CNW/ - Melcor Developments Ltd., an Alberta-based real estate development Comp...
About this update from Melcor Developments Ltd.
[{"type":"text","content":"\n\n\n\nEDMONTON, July 30 /CNW/ - Melcor Developments Ltd., an Alberta-based real\nestate development Company reported net earnings of $3,929,000 or $0.13 per\nshare (basic) on revenue of $43,362,000 for the six months ended June 30, 2009\ncompared to net earnings of $8,075,000 or $0.26 per share (basic) on revenue\nof $40,711,000 for the same period in 2008.\n\n\nEarnings for the three months ending June 30, 2009 were $3,746,000 or\n$0.12 per share (basic) on revenue of $27,279,000 compared to earnings of\n$3,702,000 or $0.12 per share (basic) on revenue of $19,779,000 during the\nsame period in 2008.\n\n\nEarnings are down year to date compared to 2008; however, the three\nmonths earnings for both years are comparable. The main reason for the\ndecrease in the year to date earnings is due to a lower margin percentage in\nthe Community Development Division. In order to reduce inventory levels, the\ndivision offered discounts and/or interest relief to builders. Some of these\npromotions are still available in those communities where sales are below\nexpectations. For the three months ended June 30, the margin percentage for\n2009 is significantly below the level in comparison to the same period in the\nprior year. This will continue until the current inventory has cycled through\nthe system. Future margins are expected to move closer to the historical\naverage as the reduced selling prices are expected to be offset by lower\ndevelopment costs. The division also generated less interest income on its\nagreements receivable due to some one time concessions made to builders in\ncommunities where housing sales were slow in order to achieve competitive\npricing. In the first quarter the division also incurred some one time write\ndowns of agreements receivable and forfeited a deposit on an option. No write\ndowns were required in the current quarter.\n\n\nGoing forward, the division is beginning to see an increase in lot sales\ndue to an increase in the demand for housing in general, particularly in the\naffordable housing (first time buyer) market, and expects to see increased\nsales in those communities which have been lagging in demand. Future\ndevelopment plans are contingent upon achieving strict presale requirements,\nexpected demand for single family lots and managing the current level of\ninventory which is considered to be on ...