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Genesis Land earns $4.52-million in 2022

2023-03-02 19:42 ET - News Release

Mr. Iain Stewart reports

GENESIS REPORTS FOURTH QUARTER AND 2022 RESULTS

Genesis Land Development Corp. has released its financial and operating results for the three months (fourth quarter (Q4)) and year ended Dec. 31, 2022 (YE).

2022 highlights (Q4 2022 and year-end 2022):

  • $140.4-million of revenues in year-end 2022: Genesis generated revenue of $140.4-million in year-end 2022, up from $109.8-million achieved in year-end 2021. Q4 2022 revenues of $54.2-million were higher when compared with $26.5-million generated in Q4 2021.
  • Net earnings in year-end 2022 were $4.5-million: Net earnings were positive for the 22nd consecutive year, with net earnings attributable to equity shareholders in year-end 2022 of $4.5-million (eight cents per share -- basic and diluted), compared with $10.9-million (24 cents per share -- basic and diluted) in year-end 2021. Net earnings attributable to equity shareholders in Q4 2022 were $3.1-million (five cents per share -- basic and diluted), compared with $4.3-million (nine cents per share -- basic and diluted) in Q4 2021.
  • 236 lots sold: In year-end 2022, Genesis sold 236 residential lots (144 to third party builders and 92 through its home building division, GBG), a decrease of 5 per cent from 247 lots in year-end 2021 (60 to third party builders and 187 through GBG). In Q4 2022, Genesis sold 106 residential lots (84 to third party builders and 22 through GBG), compared with 49 lots in Q4 2021 (two to third party builders and 47 through GBG).
  • 169 homes sold: In year-end 2022, Genesis sold 169 homes, a decrease of 12 per cent from the 191 sold in year-end 2021. In Q4 2022, Genesis sold 57 homes, compared with 51 sold in Q4 2021. During year-end 2022, Genesis had 233 new home orders compared with 249 for year-end 2021. Genesis had 205 outstanding new home orders on hand at Dec. 31, 2022 (141 at Dec. 31, 2021).
  • $16.0-million of development land sales: In year-end 2022, Genesis sold five development land parcels for $16.0-million versus four parcels for $5.9-million (including one owned by a limited partnership for $900,000) in year-end 2021. Genesis sold two development land parcels for $6.3-million in Q4 2022 versus no development land sold in Q4 2021.
  • Cash on hand of $36.6-million: On Dec. 31, 2022, Genesis had $36.6-million in cash and cash equivalents.
  • Dividends of 15 cents per share in 2022: Total cash dividends of $8.5-million (15 cents per share) were paid during the year ended Dec. 31, 2022, of which a 7.5-cent dividend was declared and paid in Q4 2022.
  • Land acquisitions: In Q2 2022, Genesis closed the acquisition of approximately 157 acres of future residential development land (Huxley) in the east sector of the city of Calgary for a total purchase price of $29.2-million. In Q3 2022, Genesis paid $6.7-million to two limited partnerships (controlled entities within the consolidated entity), resulting in Genesis directly owning 100 per cent of three land parcels totalling 456 acres in North Conrich, immediately east of Calgary in Rocky View county. In Q2 2022, Genesis entered into an agreement to acquire approximately 160 acres of future residential development land in the southeast sector of the city of Calgary for a total purchase price of up to $30-million. Genesis has paid a non-refundable deposit of $3.3-million, with the balance due on closing which is scheduled for Jan. 31, 2025.
  • Lewiston Lands LP (LLLP): During year-end 2022, the corporation transferred approximately 130 acres of residential development land located in north Calgary in the Keystone area structure plan to LLLP. At Dec. 31, 2022, 100 per cent of LLLP was owned by Genesis. Subsequent to Dec. 31, 2022, Genesis sold a 20-per-cent ownership stake in LLLP to each of two Calgary-based third party home builders. The transaction closed on Jan. 16, 2023, for cash consideration for each 20-per-cent ownership stake of $5.9-million (net of assumption of debt of $4-million each), resulting in gross proceeds for the sale of a 40-per-cent ownership interest of $11.8-million (net of assumption of debt of $8-million).

Outlook

Supported by a solid financial position, a backlog of new home orders at Dec. 31, 2022, and the relative strength of the Calgary economy, Genesis continues to consider growth opportunities, while carefully monitoring new home orders and the Calgary housing market. Housing price increases in recent years, rapidly increasing interest rates, inflationary pressures, tight labour markets and continuing supply chain constraints are impacting new home sales, home affordability and the company's ability to build new homes. These and other factors will likely negatively impact Genesis new home orders in 2023, although the supply of homes for sale in the Calgary market remains tight at 1.87 months, the lowest level reported for December in over a decade. In its December, 2022, report, the Calgary Real Estate Board (CREB) noted that further interest rate increases are expected to slow sales activity, with some slippage in price growth possible in 2023. CREB is forecasting a reduction in home sales in 2023, to 25,920, down from a record high in 2022 of 27,672. Royal Bank of Canada forecasts that Alberta will avoid a recession in 2023 and forecasts a 1.9-per-cent growth in 2023, a marked deceleration from the 4.9-per-cent rate projected for 2022. Given the changing market conditions and general economic uncertainty, Genesis remains cautious in planning and executing its strategic and business plans.

Genesis annual meeting

Genesis will hold its annual general meeting on May 18, 2023, at 9 a.m. Mountain Daylight Time. The meeting will be held as a virtual-only shareholders meeting.

Additional information

The information contained in this news release should be read in conjunction with the consolidated financial statements for the years ended Dec. 31, 2022, and Dec. 31, 2021, and the related management's discussion and analysis (MD&A) dated March 2, 2023, which have been filed with Canadian securities regulatory authorities. Copies of these documents may be obtained via SEDAR and the company's website.

About Genesis Land Development Corp.

Genesis is an integrated land developer and residential home builder with a strategy to grow its portfolio of well-located, entitled and unentitled primarily residential lands and serviced lots throughout the Calgary metropolitan area.

We seek Safe Harbor.

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