Terra Firma Capital Corporation (TSX-V: TII) ("
Terra
Firma" or the "
Company"), a real estate
finance company, today announced its financial results for the
three months and year ended December 31, 2022.
Full Year 2022 Financial Highlights:
- Total Assets of $151.4 million
- Total Investments (a supplementary
financial measure)(4) of $127.3 million
- Total Assets under management
("AUM," a non-IFRS financial measure) (3) of $132.9 million
- Future funding commitments of
$109.0 million
- Book Value per share increased by
1.0% to $7.91 (CA$10.71 translated to CA$ using the exchange
rate of $1.3544) per share
- CA$0.06 per share paid in
dividends
- Total Revenue decreased by 7.0% to
$15.1 million
- Net income and comprehensive income
of $1.5 million, a decrease of 54.5%
- Adjusted net income and
comprehensive income (a non-IFRS financial measure)(1) decreased by
39.7% to $1.6 million
- Basic and diluted earnings per
share decreased by 55.0% and 54.2%, respectively, to $0.27
(CA$0.35, translated to CA$ using the exchange rate of
$1.3011).
- Adjusted basic and diluted earnings
per share (a non-IFRS financial measure)(2) decreased by 39.6%, to
$0.29 (CA$0.38, translated to CA$ using the exchange rate of
$1.3011).
Q4 2022 Financial Highlights:
- Total Revenue decreased by 13.7% to
$3.7 million
- Net income and comprehensive income
of $0.2 million, a decrease of 83.8%
- Adjusted net income and
comprehensive income (a non-IFRS financial measure)(1) decreased by
80.5% to $0.1 million
- Basic and diluted earnings per
share decreased by 84.0% and 83.3%, as compared to Q4 2021, to
$0.04 (CA$0.05, translated to CA$ using the exchange rate of
$1.3578)
- Adjusted basic and diluted earnings
per share (a non-IFRS financial measure)(2) decreased by 80.0%, as
compared to Q4 2021, to $0.02 (CA$0.03, translated to CA$ using the
exchange rate of $1.3578)
“During the fourth quarter, Terra Firma
announced its plans to review its strategic alternatives in order
to maximize shareholder value and liquidity. As a result of the
decision to explore strategic alternatives, the Company paused
originations of new loans (continues to fund existing commitments)
and remains focused on balance sheet liquidity and asset
management. While this has impacted its revenue, all of Terra
Firma’s investments are performing well and are in full compliance
to date,” commented Glenn Watchorn, President and CEO of Terra
Firma. “The Company has retained Cormark Securities as an external
advisor to assist in the review of strategic alternatives and is
optimistic that this process will generate the best possible
outcome for its shareholders,” he further said.
Net income and comprehensive income for the
fourth quarter of 2022 was $0.2 million compared with $1.4 million
in the same period in the prior year, representing a decrease of
$1.2 million. Net income and comprehensive income for the year
ended December 31, 2022, was $1.5 million as compared to $3.3
million in the prior year, representing a decrease of $1.8 million.
Overall, net income and comprehensive income was impacted by the
Company’s shift to fund management requiring it to direct certain
of its investments to the Funds until the Funds are fully invested.
This has resulted in the Company’s increase in cash and available
credit, resulting in lower net income and comprehensive income over
the periods. Furthermore, the variance in net income and
comprehensive income for the three months and year ended December
31, 2022, was also impacted by the Company’s decision to pause
business originations as the Company explores strategic
alternatives.
The Company reported total revenue of $3.7
million in the fourth quarter of 2022, as compared to $4.3 million
in the same period in the prior year, representing a decrease of
$0.6 million. Revenue for the year ended December 31, 2022, was
$15.1 million, as compared to $16.2 million in the same period in
the prior year, representing a decrease of $1.1 million. The
decrease in total revenue was due to certain loan and mortgage
investments being partially or fully repaid resulting in a decrease
in interest and fees for the current period. Partially offsetting
the decrease was an increase in finance income related to the
Company’s shift to land banking transactions (investment in finance
leases) due to the Company’s shift in focus from acquisition and
development loans to land banking arrangements with large public
and private homebuilders.
General and administrative expenses consist of
salaries and other personnel costs, professional fees, occupancy
costs and other expenses associated with the operation of the
Company. General and administrative expenses for the three months
ended December 31, 2022, were $1.0 million compared with $1.4
million for the same period in the prior year. The period over
period variance in general and administrative expenses was
primarily due to a decrease in professional fees and salary and
benefits. The decrease in professional fees was primarily due to
lower legal fees and consulting fees recorded in the fourth quarter
of 2022 compared to the prior period. The decrease in salary and
benefits was due to a decrease in incentive compensation recorded
in the fourth quarter of 2022 compared to the same period in the
prior year.
General and administrative expenses for the year
ended December 31, 2022, decreased to $4.1 million compared with
$4.2 million in the prior year. The variance in general and
administrative expenses was mainly due to the above noted decrease
in professional fees and salary and benefits. Partially offsetting
the decrease was the increase in other expenses related to the
Company incurring higher short-term contract personnel costs and an
increase in travel expenses compared with the prior year.
Market uncertainty continued in the fourth
quarter of 2022, however, the Company’s investments have not been
impacted by these market events as borrowers continued to perform
in compliance with their agreements which included regular funding
and repayment of its various loan and mortgage investment and land
banking transactions. The Company believes its portfolio will
continue to perform and is well positioned due to key factors such
as: desirable locations in high-growth U.S. markets with strong
housing fundamentals, focus on affordable market-rate homes for
entry-level buyers and strong relationships with experienced
builders and developers. During the fourth quarter of 2022, the
Company funded $15.4 million and received repayments of $11.7
million related to its investment portfolio and continues to
receive partial and full repayments in accordance with the
agreements.
Over the course of the past 24 months, the
Company has committed to approximately $215.0 million in new
transactions that are still in the process of being funded. With
this significant increase in originations, which have been
primarily land banking transactions, the Company’s balance sheet is
fully committed to provide, in combination with Debt Fund I and
Debt Fund II, for future funding commitments of $109.0 million as
at December 31, 2022. Subsequent to the year ended December 31,
2022, future funding commitments have decreased to $90.1 million.
The Company manages future funding commitments through forecasting
cash flow from operations and considering available capital from
its own balance sheet as well as outside managed capital. The
Company expects to meet these future funding commitments using cash
on hand, capital available from its line of credit, proceeds from
repayments of investments as well as capital available within Debt
Fund I and Debt Fund II.
As part of the review of strategic alternatives,
the Company will evaluate the full range of alternatives which may
include a sale, merger, privatization, liquidation, or continuing
operations. There can be no assurance that the strategic review
process will result in any strategic alternative being chosen, or
any assurance as to its outcome or timing. The Company has not set
a timetable for completion of the review process and does not
intend to disclose developments related to the process unless and
until the Company executes a definitive agreement with respect
thereto, or it otherwise determines that further disclosure is
appropriate or required.
The Company's Management's Discussion &
Analysis and Financial Statements as at and for the three months
and year ended December 31, 2022, have been filed and are available
on SEDAR (www.sedar.com).
About Terra Firma
Terra Firma is a full service, publicly traded
real estate finance company that provides real estate financings
secured by investment properties and real estate developments in
Canada and throughout the United States. The Company focuses on
arranging and providing financing with flexible terms to real
estate developers and owners who require shorter-term loans to
bridge a transitional period of one to five years where they
require capital at various stages of development or redevelopment
of a property. These loans are typically repaid with lower cost,
longer-term debt obtained from other Canadian financial
institutions once the applicable transitional period is over or the
redevelopment is complete or from proceeds generated from the sale
of the real estate assets. Terra Firma offers a full spectrum of
real estate financing under the guidance of strict corporate
governance, clarity and transparency. For further information,
please visit Terra Firma's website at www.tfcc.ca.
Non-IFRS And Other Supplementary
Financial Measures
In this press release, as a complement to
results provided in accordance with IFRS, the Company discloses
certain financial measures not recognized under International
Financial Reporting Standards (“IFRS”) as prescribed by the
International Accounting Standards Board, which do not have
standard meanings prescribed by IFRS (collectively the “non‐IFRS
financial measures”). These non‐IFRS and other supplementary
financial measures are further described below.
Non-IFRS Financial Measures
(1) Adjusted net income and comprehensive income
as well as adjusted net income and comprehensive income
attributable to common shareholders, for the stated period, are
calculated by adjusting the net income and comprehensive income for
the following (as applicable and collectively called other
non-operating items), irrespective of materiality:
- foreign exchange gains/losses
related to the Company’s non-functional currency denominated net
assets;
- impairment losses/reversals;
- net gains/losses on the disposal of
equity-accounted investments;
- share-based compensation;
- non-recurring items;
- severance cost; and
- the income tax impact of the items
listed above.
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Three months ended |
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Years ended |
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December 31, 2022 |
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December 31, 2021 |
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Change Increase / (decrease) |
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December 31, 2022 |
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December 31, 2021 |
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Change Increase / (decrease) |
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| |
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Net income and comprehensive income |
$ |
222,200 |
|
$ |
1,370,507 |
|
$ |
(1,148,307 |
) |
|
$ |
1,521,237 |
|
$ |
3,340,552 |
|
$ |
(1,819,315 |
) |
| |
|
|
|
|
|
|
|
|
|
|
Recovery of loan and mortgage investment, investment in finance
leases and uncollectible receivable losses (tax adjusted) |
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(177,065 |
) |
|
(565,094 |
) |
|
388,029 |
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|
|
(217,552 |
) |
|
(443,776 |
) |
|
226,224 |
|
| |
Fair value adjustment - portfolio investment (tax adjusted) |
|
- |
|
|
(178,320 |
) |
|
178,320 |
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(673,236 |
) |
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(178,320 |
) |
|
(494,917 |
) |
| |
Share based compensation (recovery) (tax adjusted) |
|
117,505 |
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(82,930 |
) |
|
200,435 |
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(71,520 |
) |
|
93,382 |
|
|
(164,902 |
) |
| |
Foreign exchange (gain) loss (tax adjusted) |
|
(50,924 |
) |
|
27,795 |
|
|
(78,719 |
) |
|
|
686,924 |
|
|
(112,875 |
) |
|
799,799 |
|
| |
Severance accrual (tax adjusted) |
|
- |
|
|
- |
|
|
- |
|
|
|
381,128 |
|
|
- |
|
|
381,128 |
|
|
Adjusted net income and comprehensive income (1) |
$ |
111,716 |
|
$ |
571,958 |
|
$ |
(460,242 |
) |
|
$ |
1,626,981 |
|
$ |
2,698,963 |
|
$ |
(1,071,983 |
) |
|
(1) Adjusted net income and comprehensive income is a Non-IFRS
Financial Measure. See "Non-IFRS Financial
Measures". |
(2) Adjusted earnings per share is adjusted net
income and comprehensive income divided by the weighted average
number of outstanding shares and adjusted net income and
comprehensive income divided by the weighted average number of
diluted shares outstanding.
(3) AUM are the assets managed by the
Company on behalf of the Company’s syndicate investors, as well as
the Company’s assets, and do not include capital commitments that
have not yet been funded.
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December 31, 2022 |
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December 31, 2021 |
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Loan and mortgage investments |
|
$ |
46,162,027 |
|
$ |
47,089,194 |
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Investment in finance leases |
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67,847,493 |
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55,849,312 |
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Portfolio investments |
|
|
932,093 |
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676,421 |
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Investment in associates (1) |
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1,753,807 |
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2,174,527 |
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Investment property held in Joint Operations |
|
|
1,636,518 |
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1,747,799 |
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Convertible note receivable |
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1,511,101 |
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1,572,510 |
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Syndicates investors' share of investment |
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13,087,375 |
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13,224,860 |
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Total AUM |
|
$ |
132,930,414 |
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$ |
122,334,623 |
|
| (1)
Investment in associates includes investment in Lan Partnership and
TFCC Royal Palm Beach Inc. |
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|
These non-IFRS financial measures are not
defined by IFRS, do not have a standardized meaning, and may not be
comparable with similar measures presented by other issuers. The
Company has presented such non‐IFRS financial measures which have
been derived from the Company’s financial statements and applied on
a consistent basis because the Company believes they are of
assistance in evaluating the underlying operational and financial
performance of the Company. Non-IFRS financial measures are also
commonly used by the financial community to analyze and compare the
performance of companies engaged in the same industries. These
non‐IFRS financial measures should not be construed as alternatives
to financial measures determined in accordance with IFRS as
indicators of the Company’s performance.
Supplementary Financial
Measures
(4) Total Investments (excluding cash) consists
of the loan and mortgage investments, investment in finance leases,
portfolio investments, investments in associates, convertible note
receivable and an investment property held in joint operations.
Note that further information concerning such
non-IFRS and supplementary financial measures can be found in the
Company’s Management's Discussion & Analysis for the three
months and year ended December 31, 2022.
The TSX-V has neither approved nor disapproved
the contents of this press release. The TSX-V does not accept
responsibility for the adequacy or accuracy of this press
release.
Forward-Looking Information
This Press Release contains forward‐looking
statements with respect to matters concerning the business,
operations, strategy and financial performance of Terra Firma, and
include statements concerning Terra Firma’s approach to selecting
new investments and pricing, the expected timing of increased
clarity with housing and land market valuations, performance of
Terra Firma’s investments through current market uncertainty,
statements regarding the strategy review process, as well as future
funding commitments and their deployment. These statements
generally can be identified by use of forward-looking word such as
"may", "will", "expects", "estimates", "indicates" "anticipates",
"intends", "believe", “should” or "could" or the negative thereof
or similar variations. The future business, operations and
performance of Terra Firma could differ materially from those
expressed or implied by such statements. Such forward‐looking
statements are qualified in their entirety by the inherent risks
and uncertainties surrounding future expectations, including the
matters covered by any non-binding letters of intent that are not
completed, as well as risks relating to market factors,
competition, and dependence on tenants' financial conditions,
environmental and tax related matters, and reliance on key
personnel, as well as the risks discussed in Terra Firma’s most
recently filed annual Management’s Discussion and Analysis, any
subsequently filed interim Management’s Discussion and Analysis or
Terra Firma’s most recently filed Annual Information Form.
Forward‐looking statements are based on a number of assumptions
which may prove to be incorrect, including the ability of the
Company to adapt to any changes in government regulation and/or
economic conditions; and the continued availability of equity and
debt financing, and the risks referenced above. There can be no
assurances that forward‐looking statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward‐looking
statements. The cautionary statements qualify all forward‐looking
statements attributable to Terra Firma and persons acting on its
behalf. Unless otherwise stated, all forward looking statements
speak only as of the date of this Press Release and Terra Firma
does not assume any obligation to update such statements, whether
as a result of new information, future events or otherwise, except
as required by applicable Canadian securities laws.
For further information, please contact:
Terra Firma Capital CorporationGlenn
WatchornChief Executive OfficerPhone:
416.792.4702gwatchorn@tfcc.ca
or
Terra Firma Capital CorporationY. Dov
MeyerExecutive ChairmanPhone: 416.792.4709ydmeyer@tfcc.ca
or
Ali MahdaviManaging DirectorSpinnaker Capital
Markets Inc.Phone: 416.962.3300am@spinnakercmi.com
Terra Firma Capital
CorporationConsolidated Statements of Income and
Comprehensive IncomeFor the three months and years ended
December 31, 2022 and 2021
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Three months ended |
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Years ended |
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December 31, 2022 |
December 31, 2021 |
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December 31, 2022 |
December 31, 2021 |
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Revenue |
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Interest and fees |
$ |
1,516,020 |
|
$ |
2,730,395 |
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|
$ |
6,719,325 |
|
$ |
11,180,082 |
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Finance income |
|
2,171,933 |
|
|
1,547,442 |
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|
8,213,979 |
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4,889,886 |
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Rental |
|
41,724 |
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|
41,930 |
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|
169,335 |
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|
171,191 |
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|
3,729,677 |
|
|
4,319,767 |
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|
15,102,639 |
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|
16,241,159 |
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Expenses |
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Property operating costs |
|
16,884 |
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|
13,113 |
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|
60,409 |
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|
58,013 |
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General and administrative |
|
1,030,598 |
|
|
1,397,956 |
|
|
|
4,071,989 |
|
|
4,228,189 |
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Severance |
|
- |
|
|
- |
|
|
|
524,577 |
|
|
- |
|
|
|
|
Share based compensation (recovery) |
|
159,871 |
|
|
(112,829 |
) |
|
|
(97,306 |
) |
|
127,051 |
|
|
|
|
Interest and financing costs |
|
2,621,248 |
|
|
2,180,521 |
|
|
|
9,531,660 |
|
|
8,588,981 |
|
|
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|
Recovery of loan and mortgage investment loss |
|
(208,568 |
) |
|
(527,837 |
) |
|
|
(243,412 |
) |
|
(683,159 |
) |
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|
|
Allowance
for (recovery of) for investment in finance lease loss |
|
|
(32,336 |
) |
|
(231,222 |
) |
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|
(52,577 |
) |
|
79,382 |
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Recovery of uncollectible receivables |
|
- |
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|
(9,776 |
) |
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- |
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- |
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Fair value adjustment - convertible note receivable |
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128,364 |
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- |
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|
128,364 |
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- |
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Fair value adjustment - portfolio investment |
|
- |
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(205,556 |
) |
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|
(776,065 |
) |
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(205,556 |
) |
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Realized and unrealized foreign exchange (gain) loss |
|
139,662 |
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(20,337 |
) |
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|
53,531 |
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(147,243 |
) |
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Preferred return from portfolio investment |
|
(37,565 |
) |
|
(54,285 |
) |
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(37,565 |
) |
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(54,285 |
) |
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Share of (income) loss from investment in associates |
|
(144,625 |
) |
|
63,137 |
|
|
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(811,433 |
) |
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(221,978 |
) |
|
|
|
|
|
|
3,673,533 |
|
|
2,492,885 |
|
|
|
12,352,172 |
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|
11,769,395 |
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Income from operations before income taxes |
|
56,144 |
|
|
1,826,882 |
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|
|
2,750,467 |
|
|
4,471,764 |
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|
|
|
|
|
|
|
|
|
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|
|
Income taxes (recovery) |
|
(166,056 |
) |
|
456,375 |
|
|
|
1,229,230 |
|
|
1,131,212 |
|
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| |
|
|
|
|
|
|
|
|
|
Net income and comprehensive income |
$ |
222,200 |
|
$ |
1,370,507 |
|
|
$ |
1,521,237 |
|
$ |
3,340,552 |
|
|
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|
|
|
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|
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|
Earnings per share |
|
|
|
|
|
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| |
Basic |
$ |
0.04 |
|
$ |
0.25 |
|
|
$ |
0.27 |
|
$ |
0.60 |
|
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|
|
Diluted |
$ |
0.04 |
|
$ |
0.24 |
|
|
$ |
0.27 |
|
$ |
0.59 |
|
|
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Terra Firma Capital
CorporationConsolidated Statements of Financial
PositionAs at December 31, 2022 and 2021
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December 31, 2022 |
|
December 31, 2021 |
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Assets |
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
16,636,083 |
|
$ |
18,107,159 |
|
|
|
|
Funds held in trust |
|
5,960,395 |
|
|
3,971,799 |
|
|
|
|
Amounts receivable and prepaid expenses |
|
916,225 |
|
|
817,558 |
|
|
|
|
Loan and mortgage investments |
|
46,111,079 |
|
|
47,007,834 |
|
|
|
|
Investment in finance lease |
|
67,779,627 |
|
|
55,728,869 |
|
|
|
|
Portfolio investments |
|
932,093 |
|
|
676,421 |
|
|
|
|
Investment in associates |
|
9,228,257 |
|
|
8,364,711 |
|
|
|
|
Investment property held in joint operations |
|
1,636,518 |
|
|
1,747,799 |
|
|
|
|
Convertible note receivable |
|
1,511,101 |
|
|
1,572,510 |
|
|
|
|
Right of use asset |
|
596,603 |
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|
851,833 |
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Income taxes recoverable |
|
67,571 |
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|
459,474 |
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Deferred income tax asset |
|
21,085 |
|
|
- |
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|
Total assets |
$ |
151,396,637 |
|
$ |
139,305,967 |
|
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Liabilities |
|
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Unearned income |
|
669,950 |
|
|
373,622 |
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Loan and mortgage syndications |
|
16,034,041 |
|
|
22,043,144 |
|
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|
Loans payable |
|
79,847,824 |
|
|
63,053,210 |
|
|
|
|
Mortgages payable |
|
895,492 |
|
|
1,018,183 |
|
|
|
|
Accounts payable and accrued liabilities |
|
9,221,168 |
|
|
7,793,961 |
|
|
|
|
Credit facilities |
|
(50,000 |
) |
|
(115,321 |
) |
|
|
|
Unsecured note payable |
|
- |
|
|
289,744 |
|
|
|
|
Lease obligations |
|
633,326 |
|
|
881,314 |
|
|
|
|
Deferred income tax liabilities |
|
- |
|
|
388,890 |
|
|
|
Total liabilities |
|
107,251,801 |
|
|
95,726,747 |
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
Share capital |
$ |
25,364,104 |
|
$ |
25,293,007 |
|
|
|
|
Contributed surplus |
|
3,607,129 |
|
|
3,617,372 |
|
|
|
|
Foreign currency translation reserve |
|
(6,885,398 |
) |
|
(6,885,398 |
) |
|
|
|
Retained earnings |
|
22,059,001 |
|
|
21,554,239 |
|
|
|
|
Total equity |
|
44,144,836 |
|
|
43,579,220 |
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
$ |
151,396,637 |
|
$ |
139,305,967 |
|
|
|
|
|
|
|
|
Terra Firma Capital (TSXV:TII)
過去 株価チャート
から 11 2024 まで 12 2024
Terra Firma Capital (TSXV:TII)
過去 株価チャート
から 12 2023 まで 12 2024
