WINNIPEG, Manitoba, Aug. 31, 2017 (GLOBE NEWSWIRE) -- Gendis Inc. (TSX:GDS) today announced its financial results for the 2nd quarter ended July 31, 2017.
Revenue for the 2nd quarter was $1,524,000 compared to $1,316,000 for the 2nd quarter last year. Revenue less expense for the 2nd quarter was a loss of $1,820,000 compared to income of $379,000 for the 2nd quarter last year. Net loss for the 2nd quarter was $616,000 ($0.05 per share) compared to net earnings of $6,691,000 ($0.52 per share) for the 2nd quarter last year.
Revenue year-to-date was $3,218,000 compared to $2,543,000 year-to-date last year. Revenue less expense year-to-date was a loss of $1,331,000 compared to income of $635,000 year-to-date last year. Net income year-to-date was $3,319,000 ($0.26 per share) compared to $7,827,000 ($0.61 per share) year-to-date last year.
The volatility in net income quarter over quarter and year over year is primarily due to the change in fair value of security investments, primarily Veresen and investment properties with the attendant effect on deferred income taxes. Also, for the quarter and year-to-date this year, the Company incurred significant expenditure for repairs and renovations to its Sony Place facility in order to secure new tenants.
Condensed summarized information is as follows:
| Quarter ended | YTD ended | |||||||||
| in millions of Canadian dollars | Jul 31 | Jul 31 | Jul 31 | Jul 31 | ||||||
| except per share | 2017 | 2016 | 2017 | 2016 | ||||||
| Revenue | ||||||||||
| Lease rental revenue | 1.0 | 0.8 | 2.2 | 1.5 | ||||||
| Dividends | 0.5 | 0.5 | 1.0 | 1.1 | ||||||
| Total revenue | 1.5 | 1.3 | 3.2 | 2.5 | ||||||
| Expense | ||||||||||
| Property | 3.0 | 0.6 | 3.7 | 1.1 | ||||||
| Administration & finance | 0.3 | 0.3 | 0.8 | 0.8 | ||||||
| Total expense | 3.3 | 0.9 | 4.5 | 1.9 | ||||||
| Total revenue less total expense | (1.8 | ) | 0.4 | (1.3 | ) | 0.6 | ||||
| Fair value change: | ||||||||||
| Veresen | 6.0 | 3.8 | 10.2 | 6.0 | ||||||
| Osum | (2.2 | ) | — | (2.6 | ) | — | ||||
| Other investments in securities | (0.3 | ) | 0.5 | (0.3 | ) | 0.4 | ||||
| Investment properties | (2.4 | ) | 2.0 | (2.2 | ) | 0.8 | ||||
| Total fair value change | 1.1 | 6.3 | 5.1 | 7.2 | ||||||
| Income tax (expense) recovery | (0.1 | ) | — | 0.5 | — | |||||
| Net income (loss) | (0.6 | ) | 6.7 | 3.3 | 7.8 | |||||
| Net income (loss) per share | $(0.05 | ) | $0.52 | $0.26 | $0.61 | |||||
| Jul 31 | Jan 31 | Jul 31 | |||
| in millions of Canadian dollars | 2017 | 2017 | 2016 | ||
| Fair value of investments: | |||||
| Veresen | 36.5 | 26.4 | 21.9 | ||
| Osum | 3.3 | 5.8 | 4.7 | ||
| Other investment in securities | 2.4 | 2.6 | 3.3 | ||
| Investment properties | 30.1 | 31.7 | 30.9 | ||
| Other assets | 1.5 | 1.2 | 1.2 | ||
| Debt & payables | 11.1 | 7.4 | 6.6 | ||
| Deferred tax payable | 0.8 | 0.4 | — | ||
| Shareholders’ equity | 62.0 | 59.9 | 55.4 | ||
| Quarter ended | Year to date ended | ||||||||
| Jul 31 | Jul 31 | Jul 31 | Jul 31 | ||||||
| in millions of Canadian dollars | 2017 | 2016 | 2017 | 2016 | |||||
| Cash flow from: | |||||||||
| Operations | |||||||||
| Cash receipts | |||||||||
| Lease rental revenue | 0.9 | 0.7 | 1.9 | 1.5 | |||||
| Investment income and other receipts | 0.6 | 0.7 | 1.2 | 1.2 | |||||
| Cash disbursements & finance expense | |||||||||
| Property | (2.5 | ) | (0.9 | ) | (2.9 | ) | (1.3 | ) | |
| Administration & finance | (0.5 | ) | (0.6 | ) | (1.0 | ) | (0.9 | ) | |
| Income taxes recovered | — | 0.6 | |||||||
| Investing | |||||||||
| Expenditures on investment properties | (0.5 | ) | — | (0.7 | ) | ||||
| Financing | |||||||||
| Increase (decrease) in debt | 2.9 | 0.5 | 2.7 | (0.4 | ) | ||||
| Purchase of share capital for cancellation | (0.6 | ) | — | (0.6 | ) | ||||
| Dividends paid | (0.3 | ) | (0.3 | ) | (0.6 | ) | (0.6 | ) | |
| GENDIS INC. | |||
| INTERIM CONDENSED STATEMENT OF FINANCIAL POSITION | |||
| Jul 31 | Jan 31 | Jul 31 | |
| (unaudited - thousands of Canadian dollars) | 2017 | 2017 | 2016 |
| ASSETS | |||
| Current assets | |||
| Cash | 21 | 162 | 64 |
| Receivables | 1,320 | 891 | 884 |
| Total current assets | 1,341 | 1,053 | 948 |
| Non-current assets | |||
| Investment in securities (note 2) | 42,172 | 34,815 | 29,869 |
| Investment properties (note 3) | 30,100 | 31,740 | 30,940 |
| Furnishings and equipment | 215 | 142 | 164 |
| Deferred income tax asset | — | — | 32 |
| Total non-current assets | 72,487 | 66,697 | 61,005 |
| Total assets | 73,828 | 67,750 | 61,953 |
| LIABILITIES | |||
| Current liabilities | |||
| Credit facilities (note 4) | 7,743 | 4,997 | 4,698 |
| Payables | 2,317 | 1,447 | 874 |
| Total current liabilities | 10,060 | 6,444 | 5,572 |
| Non-current liabilities | |||
| Post employment benefit obligation | 966 | 966 | 951 |
| Deferred income tax payable | 828 | 441 | — |
| Total non-current liabilities | 1,794 | 1,407 | 951 |
| Total liabilities | 11,854 | 7,851 | 6,523 |
| SHAREHOLDERS’ EQUITY | 61,974 | 59,899 | 55,430 |
| Total liabilities and shareholders’ equity | 73,828 | 67,750 | 61,953 |
| GENDIS INC. | |||||||||||
| INTERIM CONDENSED STATEMENT OF COMPREHENSIVE INCOME | |||||||||||
| FOR THE PERIODS ENDED JULY 31 | |||||||||||
| (unaudited - thousands of Canadian | Quarter ended | Year-to-date ended | |||||||||
| dollars except for share data) | 2017 | 2016 | 2017 | 2016 | |||||||
| Revenue | |||||||||||
| Lease rentals | 1,004 | 796 | 2,179 | 1,492 | |||||||
| Dividends and other income | 520 | 520 | 1,039 | 1,051 | |||||||
| Total revenue | 1,524 | 1,316 | 3,218 | 2,543 | |||||||
| Expense | |||||||||||
| Property | 2,942 | 583 | 3,766 | 1,142 | |||||||
| Administration | 354 | 322 | 700 | 703 | |||||||
| Finance | 48 | 32 | 83 | 63 | |||||||
| Total expense | 3,344 | 937 | 4,549 | 1,908 | |||||||
| Total revenue less total expense | (1,820 | ) | 379 | (1,331 | ) | 635 | |||||
| Fair value change | |||||||||||
| Investment properties | (2,416 | ) | 1,950 | (2,226 | ) | 808 | |||||
| Investment in securities | 3,492 | 4,305 | 7,337 | 6,387 | |||||||
| Total fair value change | 1,076 | 6,255 | 5,111 | 7,195 | |||||||
| Income (loss) before income tax | (744 | ) | 6,634 | 3,780 | 7,830 | ||||||
| Income tax (expense) recovery | 128 | 57 | (461 | ) | (3 | ) | |||||
| Net income (loss) from operations and comprehensive income(loss) | (616 | ) | 6,691 | 3,319 | 7,827 | ||||||
| Net income (loss) from operations per share | $(0.05 | ) | $0.52 | $0.26 | $0.61 | ||||||
| GENDIS INC. | ||||||||
| INTERIM CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY | ||||||||
| (unaudited - thousands - shares & Canadian dollars as applicable) | Share Capital | Retained earnings | Total | |||||
| # | $ | $ | $ | |||||
| Balance – January 31, 2016 | 12,801 | 13,457 | 34,788 | 48,245 | ||||
| Comprehensive income | 7,827 | 7,827 | ||||||
| Dividends | (640 | ) | (640 | ) | ||||
| Purchase of share capital for cancellation | (1 | ) | (1 | ) | (1 | ) | (2 | ) |
| Balance – July 31, 2016 | 12,800 | 13,456 | 41,974 | 55,430 | ||||
| For the remainder of the year: | ||||||||
| Comprehensive income | 5,198 | 5,198 | ||||||
| Dividends | (640 | ) | (640 | ) | ||||
| Purchase of share capital for cancellation | (31 | ) | (34 | ) | (55 | ) | (89 | ) |
| Balance – January 31, 2017 | 12,729 | 13,422 | 46,477 | 59,899 | ||||
| Comprehensive income | 3,319 | 3,319 | ||||||
| Dividends | (636 | ) | (636 | ) | ||||
| Purchase of share capital for cancellation | (150 | ) | (157 | ) | (451 | ) | (608 | ) |
| Balance – July 31, 2017 | 12,619 | 13,265 | 48,709 | 61,974 | ||||
| GENDIS INC. | ||||||||
| INTERIM CONDENSED STATEMENT OF CASH FLOWS | ||||||||
| FOR THE PERIODS ENDED JULY 31 | ||||||||
| (unaudited - thousands of Canadian dollars) | Quarter ended | Year-to-date ended | ||||||
| 2017 | 2016 | 2017 | 2016 | |||||
| Changes in cash position | ||||||||
| By operations | ||||||||
| Cash receipts | ||||||||
| Lease rentals | 901 | 655 | 1,855 | 1,465 | ||||
| Investment income and recoverable costs | 581 | 597 | 1,155 | 1,192 | ||||
| Cash disbursements | ||||||||
| Property | (2,462 | ) | (861 | ) | 2,957 | (1,352 | ) | |
| Administration | (474 | ) | (482 | ) | (933 | ) | (864 | ) |
| Income taxes recovered | — | — | — | 638 | ||||
| Finance expense paid | (47 | ) | (32 | ) | (82 | ) | (63 | ) |
| Total by operations | (1,501 | ) | (123 | ) | (962 | ) | 1,016 | |
| By investing activities | ||||||||
| Expenditures on investment properties | (456 | ) | — | (586 | ) | (2 | ) | |
| Expenditures on furnishings and equipment | (19 | ) | (2 | ) | (96 | ) | (18 | ) |
| Total by investing activities | (475 | ) | (2 | ) | (682 | ) | (20 | ) |
| By financing activities | ||||||||
| Net advance (repayment) of credit facilities | 2,908 | 500 | 2,747 | (400 | ) | |||
| Purchase of share capital for cancellation | (608 | ) | — | (608 | ) | (2 | ) | |
| Dividends paid | (317 | ) | (320 | ) | (636 | ) | (640 | ) |
| Total by financing activities | 1,983 | 180 | 1,503 | (1,042 | ) | |||
| Increase (decrease) in cash | 7 | 55 | (141 | ) | (46 | ) | ||
| Cash – beginning of period | 14 | 9 | 162 | 110 | ||||
| Cash – end of period | 21 | 64 | 21 | 64 | ||||
Gendis Inc.
Notes to the unaudited Interim condensed Financial Statements
July 31, 2017
(All tabular amounts in thousands of Canadian dollars unless otherwise stated)
1. General information
General information on Gendis Inc. is the same as disclosed in Note 1 to the complete audited annual financial statements for the year ended January 31, 2017, which have been prepared in accordance with International Financial Reporting Standards. These interim condensed financial statements are presented in Canadian dollars, which is the Company’s functional and presentation currency. The principal accounting policies applied in the preparation of these interim condensed financial statements are the same as set out in Note 2 to the complete audited annual financial statements for the year ended January 31, 2017. These policies have been consistently applied to all periods presented.
2. Investment in securities
| Jul 31 | Jan 31 | |
| 2017 | 2017 | |
| Veresen | 36,460 | 26,440 |
| Osum | 3,268 | 5,838 |
| Other security investments | 2,444 | 2,537 |
| 42,172 | 34,815 | |
3. Investments property
| Jul 31 | Jan 31 | |
| 2017 | 2017 | |
| Industrial | 23,500 | 24,890 |
| Commercial | 6,600 | 6,850 |
| 30,100 | 31,740 | |
4. Credit facilities
| Borrowing Balance | Remaining borrowing availability | Carrying value of collateral | |||||
| Jul 31 | Jan 31 | Jul 31 | Jan 31 | Jul 31 | Jan 31 | ||
| 2017 | 2017 | 2017 | 2017 | 2017 | 2017 | ||
| Bank borrowing | 7,743 | 4,997 | 2,250 | 5,000 | 33,723 | 24,504 | |
| Broker’s margin account | — | — | 1,350 | 979 | 2,700 | 1,958 | |
| 7,743 | 4,997 | 3,600 | 5,979 | 36,423 | 26,462 | ||
5. Subsequent Event
On August 31, 2017, the Company declared a regular dividend of 2.5¢ per share to shareholders of record September 22, 2017, payable October 6, 2017.
6. Operating segments
| Quarter Ended Jul 31 | Realty | Corporate | Inter- segment | Total | |||||
| Revenue | 2017 | 1,021 | 746 | (243 | ) | 1,524 | |||
| 2016 | 813 | 727 | (224 | ) | 1,316 | ||||
| Property & administration | 2017 | 3,011 | 371 | (86 | ) | 3,296 | |||
| expense | 2016 | 644 | 339 | (78 | ) | 905 | |||
| Finance expense | 2017 | 157 | 48 | (157 | ) | 48 | |||
| 2016 | 146 | 32 | (146 | ) | 32 | ||||
| Total revenue less total | 2017 | (2,147 | ) | 327 | — | (1,820 | ) | ||
| Expense | 2016 | 23 | 356 | — | 379 | ||||
| Fair value change | 2017 | (2,417 | ) | 3,493 | — | 1,076 | |||
| 2016 | 1,950 | 4,305 | — | 6,255 | |||||
| Income tax recovery (expense) | 2017 | 723 | (595 | ) | — | 128 | |||
| 2016 | 1 | 56 | — | 57 | |||||
| Comprehensive income (loss) | 2017 | (3,841 | ) | 3,225 | — | (616 | ) | ||
| 2016 | 1,974 | 4,717 | — | 6,691 | |||||
| YTD Ended Jul 31 | Realty | Corporate | Inter- Segment | Total | |||||
| Revenue | 2017 | 2,213 | 1,477 | (472 | ) | 3,218 | |||
| 2016 | 1,527 | 1,464 | (448 | ) | 2,543 | ||||
| Property & administration | 2017 | 3,904 | 735 | (173 | ) | 4,466 | |||
| Expense | 2016 | 1,263 | 738 | (156 | ) | 1,845 | |||
| Finance expense | 2017 | 299 | 83 | (299 | ) | 83 | |||
| 2016 | 292 | 63 | (292 | ) | 63 | ||||
| Total revenue less total | 2017 | (1,990 | ) | 659 | — | (1,331 | ) | ||
| expense | 2016 | (28 | ) | 663 | — | 635 | |||
| Fair value change | 2017 | (2,227 | ) | 7,338 | — | 5,111 | |||
| 2016 | 808 | 6,387 | — | 7,195 | |||||
| Income tax recovery (expense) | 2017 | 628 | (1,089 | ) | — | (461 | ) | ||
| 2016 | 14 | (17 | ) | — | (3 | ) | |||
| Comprehensive income (loss) | 2017 | (3,589 | ) | 6,908 | — | 3,319 | |||
| 2016 | 794 | 7,033 | — | 7,827 | |||||
| Total assets | 2017 | 31,722 | 65,833 | (23,727 | ) | 73,828 | |||
| 2016 | 32,028 | 52,939 | (23,014 | ) | 61,953 | ||||
| Total liabilities | 2017 | 26,001 | 9,581 | (23,727 | ) | 11,855 | |||
| 2016 | 23,306 | 6,231 | (23,014 | ) | 6,523 | ||||