TSX Stock Symbol: GDC
CALGARY, Aug. 17 /CNW/ - Genesis Land Development Corp. ("Genesis" or the "Company") is pleased to report financial results for the three and six months ended June 30, 2009. For the three months ended June 30, 2009, the Company generated revenues of $31.1 million as compared to $22.2 million over the same period in 2008, resulting in after-tax earnings of $4.39 million or $0.10 basic and fully diluted earnings per share for Q2-2009 while earnings for Q2-2008 were $5.39 million or $0.12 basic and fully diluted per share. During the first six months of the year, Genesis recorded total revenues of $47.7 million as compared to $51.3 million over the same period in 2008. This produced after-tax earnings in 2009 of $6.75 million or $0.15 basic and fully diluted earnings per share vs. $13.49 million and $0.29 basic and fully diluted earnings per share during the first six months of 2008.
As at June 30, 2009, Genesis had a book value of $320.6 million for real estate held for development and sale. Of this total, land held for future development was $180.0 million, land under development was $120.9 million and housing projects under development was $29.2 million.
Land Development ----------------
During the first six months of 2009, Genesis sold a total of 86 lots to external builders resulting in revenues of $16.5 million. Gross margins during this period were $9.0 million (55%), with an average price per lot of $191,000. Genesis completed a total of 203 external lot sales over the six months ended June 30, 2008 resulting in revenues of $26.2 million with an average price per lot of $177,000. Gross margins during the first six months of 2008 were $16.3 million (62%). The higher price per lot in 2009 is a reflection of a greater portion of amenity lot sales occurring in 2009.
During the second quarter, Genesis sold 56 lots to external builders with 55 lots sold in the Calgary communities of Kincora, Sherwood and Taralake and 1 lot sold in the Airdrie community of Bayside. The company has subsequently sold out its lots in the community of Taralake but continues to sell lots in the communities of Kincora, Sherwood, Bayside and Canals from its inventory of approximately 200 serviced lots. With the increased demand in the Calgary Metropolitan Area (CMA) for lots from builders, Genesis is reviewing its lot development program for the communities of Sage Meadows in NW Calgary and Saddlestone in NE Calgary with the possibility of bringing these additional lots on in the first half of 2010.
Single-Family Home Building ---------------------------
Genesis Builders Group closed the sale on a total of 35 single-family homes in the three months ended June 30, 2009 for total closings of 60 over the first six months of the year. Total revenues from single-family home sales in the second quarter were $13.8 million, while the six month year-to-date total is $23.6 million. The average price of a single-family home sold in the first six months of 2009 was $394,000 as compared to $420,000 for the same period of 2008. This reduction of pricing is a general reflection of the decline in the housing market that occurred in 2008 as most of the single-family home sales closed this year were pre-sold in 2008. Genesis has nearly eliminated its single-family housing inventory built on spec (without pre-sale) and is almost entirely building new inventory when a pre-sale is first made. Thus far in 2009, the single-family home market has seen a more positive pricing environment with an average price of $436,782 in the Calgary area for the month of July. As well, the number of single-family homes under construction in the Calgary market rose in July to 501 units, up 16 per cent from a year ago.
Multi-Family Home Building --------------------------
Generations Developments ("Generations") has essentially completed construction on The Breeze, a 125 unit condo development in Airdrie, Alberta. A total of 3 sales were closed in the first quarter of 2009 with a further 26 sales closed in the second quarter of the year. The 29 total multi-family home sales that closed during the first six months of 2009 had an average selling price of $248,000. Unlike single-family housing, the multi-family marketplace in the Calgary area has not been as positive. The number of starts in July 2009 for the CMA declined with a total of 254 units constructed, down 43 per cent from the same month a year ago. The lack of new construction in the marketplace is allowing for prior inventory levels to decline, which has led to stabilized pricing in the local market more recently. Generations has seen some success selling in the last few months due to a more aggressive pricing strategy. With 13 additional sales subsequent to June 30, 2009, Generations has now achieved 42 unit sales for the project to date. The Company is closely monitoring the market before commencing any further multi-family housing development.
Commercial ----------
On October 26, 2007, the Company entered into an agreement to sell commercial land to a large anchor store in the Sage Hill Crossing Shopping Centre for $22 million. The permit conditions are currently being discussed and the anchor store continues to express interest in the land. Additionally, the Company is in discussions with another anchor store that has shown interest in the same land parcel. The Company expects to conclude a significant number of leases once the anchor store transaction is completed. Sales transactions for two smaller strip mall commercial sites in Bayside and Taralake are pending and are expected to become unconditional sales in the latter part of 2009.
UNAUDITED FINANCIAL SUMMARY
Six Months Ended 30th of June, 2009 and 2008 (in $CAN)
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2009 2008
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Assets 364,940,763 356,521,910
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Liabilities 232,012,540 223,273,908
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Shareholders Equity 132,928,223 133,248,002
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Revenue 47,722,147 51,343,117
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Expenses 40,009,812 33,286,690
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Earnings before taxes and
non-controlling interest 7,712,335 18,056,427
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Net earnings 6,748,791 13,487,999
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Earnings per share (basic & fully diluted) 0.15 0.29
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Common Shares Outstanding 44,111,757 46,035,690
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Genesis Land Development Corp. is a Calgary based land development company with an inventory of more than 24,000 future residential building sites (single-family and multi-family) and over 400 acres of commercial/ industrial lands in Western Canada, of which more than 14,000 residential lots and over 300 acres of commercial/industrial lands are located in the Calgary metropolitan area.
Certain statements in this news release could constitute forward-looking statements. The Corporation's line of business involves risk, uncertainties and other factors which may cause actual results, performance or achievements of Genesis to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. Such factors include the number of dwelling sites that Genesis will actually develop and sell.