Genesis Reports 2023 First Quarter Results

CALGARY, AB, May 4, 2023 /CNW/ - Genesis Land Development Corp. (TSX: GDC) (the "Corporation" or "Genesis") reported its financial and operating results for the three months ("Q1") ended March 31, 2023. 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 ("CMA").

The following are highlights of Genesis financial results for the first quarter of 2023:

Q1 2023 Highlights

• $37.3 Million ofRevenues in Q1 2023: Genesis sold 60 homes and 30 residential lots to third parties in Q1 2023 generating revenues of $37.3 million. In Q1 2022, Genesis sold 31 homes, 4 residential lots to third parties and a development land parcel, generating revenues of $20.4 million.
  
  
• $0.2 Million Net Earnings in Q1 2023: Net earnings attributable to equity shareholders in Q1 2023 were $0.2 million ($0.00 net earnings per share - basic and diluted), compared to net loss attributable to equity shareholders of $0.5 million ($0.01 loss per share - basic and diluted) in Q1 2022.
  
  
• 62 Lots Sold: In Q1 2023, Genesis sold 62 residential lots (30 to third-party builders and 32 through its home building division, GBG), an increase of 94% from 32 lots in Q1 2022 (4 to third-party builders and 28 through GBG).
  
  
• 60 Homes Sold: In Q1 2023, Genesis sold 60 homes, an increase of 94% from the 31 sold in Q1 2022. During Q1 2023, Genesis had 24 new home orders compared to 175 for Q1 2022. As of March 31, 2023, Genesis had 169 outstanding new home orders, compared to 285 as at March 31, 2022.
  
  
• Land Acquisition: In Q1 2023, Genesis paid $1.3 million to a limited partnership (controlled entities within the consolidated entity) to acquire additional interests in the 185-acre OMNI project, resulting in Genesis holding a 73% interest (previously 59%) in the project. The remaining 27% is held by another controlled limited partnership.
  
  
• Lewiston Lands Limited Partnership: During Q1 2023, Genesis sold two 20% interests, for a total of 40%, in the Lewiston Lands Limited Partnership to two builder partners. $11.8 million of proceeds were realized by Genesis. Prior to these sales, a loan of $20 million was secured against the Lewiston lands. The loan proceeds were fully transferred to Genesis. Genesis considers establishing land partnerships when a new community has received full municipal approvals. Partners are selected carefully, to add value to the execution of the community's development program.
  
  
• Cash on Hand of $28.5 Million: On March 31, 2023, Genesis had $28.5 million in cash and cash equivalents and loan and credit facilities of $49.5 million which is 14% of the total book value of assets.

Selected Financial Results and Operating Data:

Outlook

Supported by a solid financial position, a backlog of new-home orders, and the strength of Calgary's economy, Genesis continues to add growth opportunities in both its land and housing divisions. Housing price increases in recent years, rapidly increasing interest rates, inflationary pressures, tight labour markets and continuing supply chain constraints are impacting new home orders, home affordability and our ability to build new homes. These negative factors are being partially offset by housing demand from newcomers to Alberta, the low supply of homes for sale in the tight Calgary market and the growing economy.

The Calgary Real Estate Board is forecasting an overall reduction in home sales in 2023 in Calgary, to 25,921 units, down from a record high in 2022 of 29,672 units. The Royal Bank of Canada forecasts Alberta GDP to grow by 1.9% in 2023, a marked deceleration from the 4.3% growth in 2022. Immigration to both Alberta and the CMA continues to be strong into 2023 as evidenced by the 3% growth in the working age population in the CMA to the end of March 2023 as compared to March 2022. In addition to strong international immigration, people are moving to the CMA from across Canada, with the biggest net inflows coming from the two provinces with the most unaffordable housing markets, Ontario and BC. Continued mixed economic indicators and general economic uncertainty, lead Genesis to remain cautious in planning and executing its strategic and business plans. 

Additional Information

The information contained in this press release should be read in conjunction with the unaudited condensed consolidated interim financial statements for the three months ended March 31, 2023 and 2022 and the related Management's Discussion and Analysis ("MD&A") dated May 4, 2023 which have been filed with Canadian securities regulatory authorities. Copies of these documents may be obtained via www.sedar.com or our website at www.genesisland.com.

Cautionary Note Regarding Forward-Looking Statements

This news release contains certain statements which constitute forward-looking statements or information ("forward-looking statements") within the meaning of applicable securities legislation, including Canadian Securities Administrators' National Instrument 51-102 - Continuous Disclosure Obligations, concerning the business, operations and financial performance and condition of Genesis. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "proposed", "scheduled", "future", "likely", "seeks", "estimates", "plans", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved".

Although Genesis believes that the anticipated future results, performance or achievements expressed or implied by forward-looking statements are based upon reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements because they involve assumptions, known and unknown risks, uncertainties and other factors many of which are beyond the Corporation's control, which may cause the actual results, performance or achievements of Genesis to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements. Accordingly, Genesis cannot give any assurance that its expectations will in fact occur and cautions that actual results may differ materially from those in the forward-looking statements.

Forward-looking statements are based on factors or assumptions made by us with respect to, among other things, opportunities that may or may not be pursued by us; changes in the real estate industry; fluctuations in the Canadian and Alberta economy; changes in the number of lots sold and homes delivered per year; and changes in laws or regulations or the interpretation or application of those laws and regulations. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control.

Forward-looking statements in this news release include, but are not limited to, Genesis' strategy; the ability to take advantage of growth opportunities; anticipated general economic and business conditions (including prospects for the local economy); and areas of continued operational focus.

Factors that could cause actual results to differ materially from those set forth in the forward-looking statements include, but are not limited to: the impact of contractual arrangements and incurred obligations on future operations and liquidity; local real estate conditions, including the development of properties in close proximity to Genesis' properties and the strength and growth of the Calgary economy; the uncertainties of real estate development and acquisition activity; fluctuations in interest and inflation rates; ability to access and raise capital on favorable terms; not realizing on the anticipated benefits from transactions or not realizing on such anticipated benefits within the expected time frame; the cyclicality of the oil and gas industry; changes in the Canadian / U.S. dollar exchange rate; labor matters; governmental regulations; general economic and financial conditions; stock market volatility; and other risks and factors described from time to time in the documents filed by Genesis with the securities regulators in Canada available at www.sedar.com, including in the Corporation's MD&A under the heading "Risks and Uncertainties" and the Corporation's annual information form under the heading "Risk Factors".

Furthermore, the forward-looking statements contained in this news release are made as of the date of this news release and, except as required by applicable law, Genesis does not undertake any obligation to publicly update or to revise any of the forward-looking statements, whether as a result of new information, future events or otherwise.

SOURCE Genesis Land Development Corp.

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