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 and six-month periods ended June 30, 2023.
Q2 2023 Financial Highlights:
- Total Assets of $132.8 million
- Total Investments (a supplementary
financial measure)(4) of $101.8 million
- Total Assets under management
("AUM," a non-IFRS financial measure) (3) of $105.7 million as
compared to $131.4 million as at December 31, 2022
- Future funding commitments of $56.8
million as compared to $109.0 million as at December 31, 2022
- Book Value per share decreased by
0.5% to $7.93 (CA$10.50, translated to CA$ using the closing
exchange rate of $1.3242) per share
- CA$0.06 per share paid in
dividends
- Total Revenue decreased by 22.7%,
as compared to Q2 2022, to $2.9 million
- Net income and comprehensive income
was $0.05 million, a decrease of 81.0% as compared to Q2 2022
- Adjusted net income and
comprehensive income (a non-IFRS financial measure)(1) of $0.04
million, a decrease of 95.1% as compared to Q2 2022
- Basic and diluted earnings per
share decreased by 80.0%, as compared to Q2 2022, to $0.01
(CA$0.01, translated to CA$ using the average exchange rate of
$1.3430)
- Adjusted basic and diluted earnings
per share (a non-IFRS financial measure)(2) decreased by 92.3%, as
compared to Q2 2022, to $0.01 (CA$0.01, translated to CA$ using the
exchange rate of $1.3430)
Net income and comprehensive income attributable
to common shareholders for the three months ended June 30, 2023,
was $0.05 million or $0.01 per basic and diluted share compared
with $0.3 million or $0.05 per basic and diluted share for the same
period in the prior year. Net income and comprehensive income
attributable to common shareholders for the six months ended June
30, 2023, was $0.6 million or $0.11 per basic and diluted share
compared to $0.8 million or $0.15 per basic share and diluted share
for the same period in the prior year. Overall, net income and
comprehensive income was impacted by the Company’s decision to
pause business originations in the latter part of 2022 due to the
market volatility, and by the Company’s subsequent decision to
explore strategic alternatives and to further increase the
Company’s liquidity.
For the three months ended June 30, 2023, the
Company reported total revenue of $2.9 million compared to $3.8
million in the same period in the prior year, representing a
decrease of $0.9 million or 22.7%. Revenue for the six months ended
June 30, 2023, was $6.8 million as compared to $7.6 million in the
same period in the prior year, representing a decrease of $0.8
million or 10.9%. The variance was due to the repayment for the
three and six months ended June 30, 2023, of $8.8 million and $19.8
million, respectively, on certain loan and mortgage investments
which included partial and full repayments. These repayments were
partially offset with the increase in funding related to existing
loan and mortgage investments. The variance was also due to the
Company recording an adjustment of $0.3 million related to an early
repayment discount on one of its loan and mortgage investments
during the three months ended June 30, 2023.
General and administrative expenses for the
three months ended June 30, 2023, were $1.1 million compared to
$1.0 million for the same period in the prior year. General and
administrative expenses for the six months ended June 30, 2023,
were $2.0 million compared to $2.1 million for the same period in
the prior year. The variance was primarily related to an increase
in professional fees arising from the previously announced review
of strategic alternative with no similar expenses incurred in the
prior period. Partially offsetting the increase was a decrease in
salary and benefits as there was no incentive compensation recorded
in the current period compared to the prior period. Additionally,
the decrease in salary and benefits was impacted by a lower head
count compared to the comparative period which included the
departure of the Company’s former Chief Financial Officer &
Corporate Secretary due to health reasons in the second quarter of
2022.
At June 30, 2023, the Company’s liquidity
position included a cash balance of $25.2 million. During the
second quarter of 2023, the Company’s undrawn line of credit
(“LOC”) matured. Subsequent to the second quarter, the Company, in
accordance with its extension options, renegotiated its LOC for a
maximum amount of up to $20.0 million including its accordion
feature and a new maturity date of May 25, 2024. The Company’s
available capital is in excess of the Company’s portion of the
future funding commitments.
During the six months ended June 30, 2023, the
Company’s second debt fund (Debt Fund II) called additional capital
of $3.2 million from its investors which has been fully funded. As
at June 30, 2023, total contributions to Debt Fund II from
investors and the Company were $43.8 million and $5.1 million,
respectively. To date, two investments within Debt Fund II were
fully repaid. As at June 30, 2023, Debt Fund II had a combined
total of 11 active investments.
Subsequent to June 30, 2023, the Company
returned capital on its first debt fund (Debt Fund I) for a total
of $7.5 million to its investors and no further capital will be
called on Debt Fund I. As at June 30, 2023, total contributions to
Debt Fund I from investors and the Company were $22.3 million and
$2.7 million, respectively. To date, four investments within Debt
Fund I were fully repaid. As at June 30, 2023, Debt Fund I had a
combined total of four active investments.
During the three months ended June 30, 2023, the
Company continued with its review of strategic alternatives which
includes consideration of merger and acquisition, privatization and
liquidation alternatives. There is no definitive timeline of
completion and there can be no assurance that the process will
result in any transaction, or as to the timing of any such
transaction. The Company does not intend to disclose developments
related to the process unless and until the Company reaches 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 and six
months ended June 30, 2023 have been filed and are available on
SEDAR+ (www.sedarplus.ca).
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,
for the stated period, is 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.
|
|
|
|
|
|
|
|
|
| |
|
Three months ended |
|
|
Six months ended |
|
|
June 30,2023 |
|
June 30,2022 |
|
ChangeIncrease /(decrease) |
|
|
June 30,2023 |
|
June 30,2022 |
|
ChangeIncrease /(decrease) |
|
| |
|
|
|
|
|
|
|
|
Net income and comprehensive income |
$ |
49,027 |
|
$ |
258,103 |
|
$ |
(209,076 |
) |
|
$ |
629,202 |
|
$ |
835,679 |
|
$ |
(206,477 |
) |
| |
|
|
|
|
|
|
|
| Recovery of
loan and mortgage investment loss, |
|
|
|
- |
|
|
|
|
|
|
recovery of investment in finance lease loss (tax adjusted) |
|
(16,587 |
) |
|
(12,524 |
) |
|
(4,063 |
) |
|
|
(45,549 |
) |
|
(44,211 |
) |
|
(1,338 |
) |
| Fair value
adjustment - convertible note receivable (tax adjusted) |
|
28,766 |
|
|
- |
|
|
28,766 |
|
|
|
56,522 |
|
|
- |
|
|
56,522 |
|
| Fair value
adjustment - portfolio investment (tax adjusted) |
|
- |
|
|
(136,758 |
) |
|
136,758 |
|
|
|
- |
|
|
(136,758 |
) |
|
136,758 |
|
| Share based
compensation (recovery) (tax adjusted) |
|
(6,725 |
) |
|
104,873 |
|
|
(111,598 |
) |
|
|
148,950 |
|
|
6,246 |
|
|
142,704 |
|
| Foreign
exchange gain (tax adjusted) |
|
(19,281 |
) |
|
129,742 |
|
|
(149,023 |
) |
|
|
(20,403 |
) |
|
93,070 |
|
|
(113,473 |
) |
| Severance
accrual (tax adjusted) |
|
- |
|
|
381,128 |
|
|
(381,128 |
) |
|
|
- |
|
|
381,128 |
|
|
(381,128 |
) |
|
Adjusted net income and comprehensive income(1) |
$ |
35,200 |
|
$ |
724,564 |
|
$ |
(689,364 |
) |
|
$ |
768,722 |
|
$ |
1,135,154 |
|
$ |
(366,432 |
) |
| (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.
| |
|
June 30, 2023 |
|
December 31, 2022 |
|
| |
|
|
|
| |
Loan and mortgage investments(2) |
$ |
34,353,065 |
|
$ |
46,162,027 |
|
| |
Investment in finance leases(2) |
|
53,653,359 |
|
|
67,847,493 |
|
| |
Portfolio investments |
|
932,093 |
|
|
932,093 |
|
| |
Investment in associates(1) |
|
1,919,137 |
|
|
1,753,807 |
|
| |
Investment property held in Joint Operations |
|
1,673,841 |
|
|
1,636,518 |
|
| |
Convertible note receivable |
|
1,545,563 |
|
|
1,511,101 |
|
| |
Syndicates investors' share of investment |
|
11,600,000 |
|
|
11,600,000 |
|
| |
Total AUM |
$ |
105,677,058 |
|
$ |
131,443,039 |
|
| |
(1) Investment in
associates includes investment in Lan Partnership and TFCC Royal
Palm Beach Inc. |
| |
(2) Before deducting the allowance for loan and mortgage investment
loss at June 30, 2023 and December 31, 2022 of $31,671 and $50,948,
respectively and before deducting the allowance for investment in
finance lease loss at June 30, 2023 and December 31, 2022 of
$25,172 and $67,866, respectively. |
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) consist of
the loan and mortgage investments, investment in finance leases,
portfolio investments, investment 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 and
six months ended June 30, 2023.
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 the strategy review process and the
renewal of the LOC. 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
Terra Firma Capital
CorporationInterim Condensed Consolidated
Statements of Income and Comprehensive IncomeFor the three
and six months ended June 30, 2023 and 2022(Unaudited)
|
|
|
Three months ended |
|
Six months ended |
|
|
|
June 30, 2023 |
June 30, 2022 |
|
June 30, 2023 |
June 30, 2022 |
|
Revenue |
|
|
|
|
|
|
|
Interest and fees |
$ |
1,057,094 |
|
$ |
1,900,132 |
|
|
$ |
2,673,970 |
|
$ |
3,660,538 |
|
|
|
Finance income |
|
1,845,981 |
|
|
1,863,375 |
|
|
|
4,049,525 |
|
|
3,889,913 |
|
|
|
Rental |
|
40,281 |
|
|
42,618 |
|
|
|
80,416 |
|
|
86,031 |
|
|
|
|
|
2,943,356 |
|
|
3,806,125 |
|
|
|
6,803,911 |
|
|
7,636,482 |
|
|
Expenses |
|
|
|
|
|
|
|
Property operating costs |
|
13,621 |
|
|
14,553 |
|
|
|
27,132 |
|
|
29,624 |
|
|
|
General and administrative |
|
1,124,597 |
|
|
958,192 |
|
|
|
1,995,494 |
|
|
2,061,728 |
|
|
|
Severance cost |
|
- |
|
|
524,577 |
|
|
|
- |
|
|
524,577 |
|
|
|
Share based compensation (recovery) |
|
(9,150 |
) |
|
142,685 |
|
|
|
202,653 |
|
|
8,498 |
|
|
|
Interest and financing costs |
|
2,212,320 |
|
|
2,010,601 |
|
|
|
4,472,815 |
|
|
4,526,310 |
|
|
|
Allowance for (recovery of) loan and mortgage investment loss |
|
111 |
|
|
(12,292 |
) |
|
|
(19,277 |
) |
|
(38,058 |
) |
|
|
Recovery of investment in finance lease loss |
|
(22,678 |
) |
|
(4,747 |
) |
|
|
(42,694 |
) |
|
(22,093 |
) |
|
|
Realized and unrealized foreign exchange gain |
|
(102,658 |
) |
|
(179,697 |
) |
|
|
(92,438 |
) |
|
(202,460 |
) |
|
|
Fair value adjustment - convertible note receivable |
|
33,160 |
|
|
- |
|
|
|
65,155 |
|
|
- |
|
|
|
Fair value adjustment - portfolio investment |
|
- |
|
|
(186,065 |
) |
|
|
- |
|
|
(186,065 |
) |
|
|
Share of income from investment in associates |
|
(255,424 |
) |
|
(183,066 |
) |
|
|
(546,556 |
) |
|
(418,136 |
) |
|
|
|
|
2,993,899 |
|
|
3,084,741 |
|
|
|
6,062,284 |
|
|
6,283,925 |
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations before income
taxes |
|
(50,543 |
) |
|
721,384 |
|
|
|
741,627 |
|
|
1,352,557 |
|
|
|
|
|
|
|
|
|
|
Income taxes (recovery) |
|
(99,570 |
) |
|
463,281 |
|
|
|
112,425 |
|
|
516,878 |
|
| |
|
|
|
|
|
|
|
Net income and comprehensive income |
$ |
49,027 |
|
$ |
258,103 |
|
|
$ |
629,202 |
|
$ |
835,679 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
| |
Basic |
$ |
0.01 |
|
$ |
0.05 |
|
|
$ |
0.11 |
|
$ |
0.15 |
|
|
|
Diluted |
$ |
0.01 |
|
$ |
0.05 |
|
|
$ |
0.11 |
|
$ |
0.15 |
|
Terra Firma Capital
CorporationConsolidated Statements of Financial
PositionAs at June 30, 2023 and December 31,
2022(Unaudited)
|
|
|
June 30,2023 |
|
December 31,2022 |
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
25,237,791 |
|
$ |
16,636,083 |
|
|
|
Funds held in trust |
|
3,719,925 |
|
|
5,960,395 |
|
|
|
Amounts receivable and prepaid expenses |
|
1,038,185 |
|
|
916,225 |
|
|
|
Loan and mortgage investments |
|
34,321,394 |
|
|
46,111,079 |
|
|
|
Investment in finance lease |
|
53,628,187 |
|
|
67,779,627 |
|
|
|
Portfolio investments |
|
932,093 |
|
|
932,093 |
|
|
|
Investment in associates |
|
9,632,852 |
|
|
9,228,257 |
|
|
|
Investment property held in joint operations |
|
1,673,841 |
|
|
1,636,518 |
|
|
|
Convertible note receivable |
|
1,545,563 |
|
|
1,511,101 |
|
|
|
Right of use asset |
|
533,678 |
|
|
596,603 |
|
|
|
Income taxes recoverable |
|
195,222 |
|
|
67,571 |
|
|
|
Deferred income tax asset |
|
292,647 |
|
|
21,085 |
|
|
|
|
|
|
|
Total assets |
$ |
132,751,378 |
|
$ |
151,396,637 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
Unearned income |
$ |
60,050 |
|
$ |
669,950 |
|
|
|
Loan and mortgage syndications |
|
13,465,670 |
|
|
16,034,041 |
|
|
|
Loans payable |
|
66,894,980 |
|
|
79,847,824 |
|
|
|
Mortgages payable |
|
887,708 |
|
|
895,492 |
|
|
|
Accounts payable and accrued liabilities |
|
6,577,023 |
|
|
9,221,168 |
|
|
|
Credit facilities |
|
- |
|
|
(50,000 |
) |
|
|
Lease obligations |
|
589,408 |
|
|
633,326 |
|
|
Total liabilities |
|
88,474,839 |
|
|
107,251,801 |
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
Share capital |
|
25,364,104 |
|
|
25,364,104 |
|
|
|
Contributed surplus |
|
3,610,540 |
|
|
3,607,129 |
|
|
|
Foreign currency translation reserve |
|
(6,885,398 |
) |
|
(6,885,398 |
) |
|
|
Retained earnings |
|
22,187,293 |
|
|
22,059,001 |
|
|
|
Total equity |
|
44,276,539 |
|
|
44,144,836 |
|
|
|
|
|
|
|
Total liabilities and equity |
$ |
132,751,378 |
|
$ |
151,396,637 |
|
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
