WINNIPEG, MB–(Marketwired – June 09, 2017) – Gendis Inc. (TSX: GDS) today announced its financial results for the 1st quarter ended April 30, 2017.
Net earnings for the 1st quarter were $3,935,000 ($0.31 per share) compared to net earnings of $1,136,000 ($0.09 per share) for the prior year 1st quarter. Revenue for the 1st quarter was $1,695,000 compared to $1,227,000 for the prior year 1st quarter. Revenue less expense for the 1st quarter was $489,000 compared to $255,000 for the prior year 1st quarter. The increase is primarily due to new tenancy in the Company’s Sony place Facility.
The volatility in net earnings quarter over quarter is primarily due to the change in fair value of security investments and investment properties with the attendant effect on deferred income taxes.
On May 1, 2017, Pembina Pipeline announced an offer to acquire Veresen. The closing date is expected to occur in the 3rd or 4th quarter of this year. It is anticipated that the transaction will settle on a pro-rata share and cash exchange basis, providing Gendis with approximately $9.6 million in cash and 0.6 million Pembina pipeline shares. These shares would have a fair value of approximately $28 million as at June 8, 2017. Pembina Pipeline owns and operates conventional, heavy oil and oil sands pipelines, natural gas gathering and processing facilities and other infrastructure assets. The transaction is subject to regulatory and shareholder approval.
Condensed summarized information is as follows:
| Quarter ended | ||||||
| in millions of Canadian dollars | Apr 30 | Apr 30 | ||||
| except per share | 2017 | 2016 | ||||
| Revenue | ||||||
| Lease rental revenue | 1.2 | 0.7 | ||||
| Dividends | 0.5 | 0.5 | ||||
| Total revenue | 1.7 | 1.2 | ||||
| Expense | ||||||
| Property | 0.8 | 0.6 | ||||
| Administration & finance | 0.4 | 0.4 | ||||
| Total expense | 1.2 | 1.0 | ||||
| Total revenue less total expense | 0.5 | 0.2 | ||||
| Fair value change: | ||||||
| Veresen | 4.0 | 2.1 | ||||
| Other security investments | (0.2 | ) | – | |||
| Investment properties | 0.2 | (1.1 | ) | |||
| Total fair value change | 4.0 | 1.0 | ||||
| Income tax expense | 0.6 | 0.1 | ||||
| Net earnings | 3.9 | 1.1 | ||||
| Earnings per share | $0.31 | $0.09 | ||||
| Apr 30 | Jan 31 | Apr 30 | ||||
| in millions of Canadian dollars | 2017 | 2017 | 2016 | |||
| Fair value of investments: | ||||||
| Veresen | 30.4 | 26.4 | 18.1 | |||
| Osum | 5.4 | 5.8 | 4.8 | |||
| Other security investments | 2.9 | 2.6 | 2.7 | |||
| Investment properties | 32.1 | 31.7 | 29.0 | |||
| Other assets | 1.3 | 1.2 | 0.9 | |||
| Debt & payables | 7.6 | 7.4 | 6.3 | |||
| Deferred tax payable | 1.0 | 0.4 | 0.1 | |||
| Shareholders’ equity | 63.5 | 59.9 | 49.1 | |||
| Quarter ended | |||||||
| Apr 30 | Apr 30 | ||||||
| in millions of Canadian dollars | 2017 | 2016 | |||||
| Cash flow from: | |||||||
| Operations | |||||||
| Cash receipts | |||||||
| Lease rentals | 1.0 | 0.8 | |||||
| Dividends & other receipts | 0.6 | 0.6 | |||||
| Cash disbursements & finance expense | |||||||
| Property | (0.5 | ) | (0.5 | ) | |||
| Administration & finance expense | (0.5 | ) | (0.4 | ) | |||
| Income taxes recovered | – | 0.6 | |||||
| Investing | |||||||
| Expenditures on investment properties | (0.1 | ) | – | ||||
| Net expenditures on equipment | (0.1 | ) | – | ||||
| Financing | |||||||
| Decrease in debt | (0.2 | ) | (0.9 | ) | |||
| Dividend | (0.3 | ) | (0.3 | ) | |||
| GENDIS INC. | ||||||
| INTERIM CONDENSED STATEMENT OF FINANCIAL POSITION | ||||||
| Apr 30 | Jan 31 | Apr 30 | ||||
| (unaudited – thousands of Canadian dollars) | 2017 | 2017 | 2016 | |||
| ASSETS | ||||||
| Current assets | ||||||
| Cash | 14 | 162 | 9 | |||
| Receivables | 1,154 | 891 | 719 | |||
| Total current assets | 1,168 | 1,053 | 728 | |||
| Non-current assets | ||||||
| Investments in securities (note 2) | 38,669 | 34,815 | 25,554 | |||
| Investment properties (note 3) | 32,060 | 31,740 | 28,990 | |||
| Other current assets | 219 | 142 | 175 | |||
| Total non-current assets | 70,948 | 66,697 | 54,719 | |||
| Total assets | 72,116 | 67,750 | 55,447 | |||
| LIABILITIES | ||||||
| Current liabilities | ||||||
| Credit facilities (note 4) | 4,835 | 4,997 | 4,198 | |||
| Payables | 1,770 | 1,447 | 1,145 | |||
| Total current liabilities | 6,605 | 6,444 | 5,343 | |||
| Non-current liabilities | ||||||
| Post employment benefit obligation | 966 | 966 | 951 | |||
| Deferred income tax payable | 1,030 | 441 | 94 | |||
| Total non-current liabilities | 1,996 | 1,407 | 1,045 | |||
| Total liabilities | 8,601 | 7,851 | 6,388 | |||
| SHAREHOLDERS’ EQUITY | 63,515 | 59,899 | 49,059 | |||
| Total liabilities and shareholders’ equity | 72,116 | 67,750 | 55,447 | |||
| GENDIS INC. | |||||
| INTERIM CONDENSED STATEMENT OF COMPREHENSIVE INCOME | |||||
| FOR THE PERIODS ENDED APRIL 30 | |||||
| (unaudited – thousands of Canadian | quarter ended | ||||
| dollars except for share data) | 2017 | 2016 | |||
| Revenue | |||||
| Lease rentals | 1,175 | 696 | |||
| Dividends and other income | 520 | 531 | |||
| Total revenue | 1,695 | 1,227 | |||
| Expense | |||||
| Property | 824 | 558 | |||
| Administration | 346 | 383 | |||
| Finance | 36 | 31 | |||
| Total expense | 1,206 | 972 | |||
| Total revenue less total expense | 489 | 255 | |||
| Fair value change | |||||
| Investments in securities | 3,845 | 2,083 | |||
| Investment properties | 190 | (1,142 | ) | ||
| Total fair value change | 4,035 | 941 | |||
| Earnings before income tax | 4,524 | 1,196 | |||
| Income tax expense | 589 | 60 | |||
| Net earnings from operations and comprehensive income | 3,935 | 1,136 | |||
| Net earnings from operations per share | $0.31 | $0.09 | |||
| 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 | 1,136 | 1,136 | ||||||||||
| Purchase of share capital for cancellation | (1 | ) | (1 | ) | (1 | ) | (2 | ) | ||||
| Dividend | (320 | ) | (320 | ) | ||||||||
| Balance – April 30, 2016 | 12,800 | 13,456 | 35,603 | 49,059 | ||||||||
| For the remainder of the year: | ||||||||||||
| Comprehensive loss | 11,889 | 11,889 | ||||||||||
| Purchase of share capital for cancellation | (31 | ) | (34 | ) | (55 | ) | (89 | ) | ||||
| Dividends | (960 | ) | (960 | ) | ||||||||
| Balance – January 31, 2017 | 12,769 | 13,422 | 46,477 | 59,899 | ||||||||
| Comprehensive income | 3,935 | 3,935 | ||||||||||
| Dividend | (319 | ) | (319 | ) | ||||||||
| Balance – April 30, 2017 | 12,769 | 13,422 | 50,093 | 63,515 | ||||||||
| GENDIS INC. | |||||||
| INTERIM CONDENSED STATEMENT OF CASH FLOWS | |||||||
| FOR THE PERIODS ENDED APRIL 30 | |||||||
| (unaudited – thousands of Canadian | Quarter ended | ||||||
| dollars) | 2017 | 2016 | |||||
| Changes in cash position | |||||||
| By operations | |||||||
| Cash receipts | |||||||
| Lease rentals | 954 | 836 | |||||
| Dividends | 575 | 596 | |||||
| Cash disbursements | |||||||
| Property | (495 | ) | (517 | ) | |||
| Administration | (459 | ) | (382 | ) | |||
| Incomes taxes recovered | – | 638 | |||||
| Finance expense paid | (35 | ) | (31 | ) | |||
| Total by operations | 540 | 1,140 | |||||
| By investing activities | |||||||
| Expenditures on investment properties | (130 | ) | – | ||||
| Expenditures on furnishings and equipment | (78 | ) | (19 | ) | |||
| Total by investing activities | (208 | ) | (19 | ) | |||
| By financing activities | |||||||
| Net advance (repayment) of credit facilities | (161 | ) | (900 | ) | |||
| Purchase of share capital for cancellation | – | (2 | ) | ||||
| Dividend paid | (319 | ) | (320 | ) | |||
| Total by financing activities | (480 | ) | (1,222 | ) | |||
| Decrease in cash | (148 | ) | (101 | ) | |||
| Cash – beginning of period | 162 | 110 | |||||
| Cash – end of period | 14 | 9 | |||||
Gendis Inc.
Notes to the unaudited Interim condensed Financial Statements
April 30, 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. Investments in securities
| Apr 30 | Jan 31 | |||
| 2017 | 2017 | |||
| Veresen | 30,440 | 26,440 | ||
| Osum | 5,441 | 5,838 | ||
| Other security investments | 2,788 | 2,537 | ||
| 38,669 | 34,815 | |||
3. Investments property
| Apr 30 | Jan 31 | |||
| 2017 | 2017 | |||
| Industrial | 25,160 | 24,890 | ||
| Commercial | 6,900 | 6,850 | ||
| 32,060 | 31,740 | |||
4. Credit facilities
| Borrowing Balance |
Remaining borrowing availability |
Carrying value of collateral |
||||||||||
| Apr 30 | Jan 31 | Apr 30 | Jan 31 | Apr 30 | Jan 31 | |||||||
| 2017 | 2017 | 2017 | 2017 | 2017 | 2017 | |||||||
| Banker’s acceptances | 4,835 | 4,998 | 5,000 | 5,000 | 25,093 | 24,504 | ||||||
| Broker’s margin account | – | – | 978 | 979 | 1,958 | 1,958 | ||||||
| 4,835 | 4,998 | 5,978 | 5,979 | 27,051 | 26,462 | |||||||
5. Subsequent Events
On June 9, 2017, the Company declared a regular dividend of 2.5¢ per share to shareholders of record June 23, 2017, payable July 7, 2017.
From April 30, 2017 to June 8, 2017, the fair value of the Company’s investment in securities increased by approximately $6 million, primarily due to a takeover offer announced on May 1, 2017 by Pembina Pipeline for Veresen. The transaction is expected to close before the end of this year.
6. Operating segments
| Quarter Ended Apr 30 |
Realty |
Corporate |
Inter- segment |
Total |
||||||||
| Revenue | 2017 | 1,192 | 731 | (228 | ) | 1,695 | ||||||
| 2016 | 713 | 738 | (224 | ) | 1,227 | |||||||
| Property & administration | 2017 | 893 | 363 | (86 | ) | 1,170 | ||||||
| expense | 2016 | 618 | 401 | (78 | ) | 941 | ||||||
| Finance expense | 2017 | 142 | 36 | (142 | ) | 36 | ||||||
| 2016 | 146 | 31 | (146 | ) | 31 | |||||||
| Total revenue less total | 2017 | 157 | 332 | – | 489 | |||||||
| expense | 2016 | (51 | ) | 306 | – | 255 | ||||||
| Fair value change | 2017 | 190 | 3,845 | – | 4,035 | |||||||
| 2016 | (1,142 | ) | 2,083 | – | 941 | |||||||
| Income tax expense (recovery) | 2017 | 95 | 494 | – | 589 | |||||||
| 2016 | (21 | ) | 81 | – | 60 | |||||||
| Comprehensive income | 2017 | 252 | 3,683 | – | 3,935 | |||||||
| 2016 | (1,172 | ) | 2,308 | – | 1,136 | |||||||
| Total assets | 2017 | 32,992 | 60,231 | (21,107 | ) | 72,116 | ||||||
| 2016 | 29,509 | 48,047 | (22,109 | ) | 55,447 | |||||||
| Total liabilities | 2017 | 23,430 | 6,278 | (21,107 | ) | 8,601 | ||||||
| 2016 | 22,756 | 5,741 | (22,109 | ) | 6,388 | |||||||
For more information, please contact:
James E. Cohen
President & Chief Executive Officer
Telephone: (204)474-5200
Fax: (204)474-5201
E-mail: Email contact
Web site: www.gendis.ca
