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EDMONTON, Alberta, March 16, 2023 (GLOBE NEWSWIRE) -- Melcor Developments Ltd. (TSX: MRD), a real estate development and asset management company with operations across western Canada and in the United States, today reported results for the fourth quarter and year ended December 31, 2022. Revenue decreased by 23% to $241.75 million in 2022 compared to a record high of $315.63 million in 2021. Net income was up 59% to $89.35 million or $2.75 per share (basic) in 2022, compared to $56.31 million or $1.70 per share (basic) in 2021. Net income is impacted by non-cash items including fair value adjustments on REIT units and investment properties. These fair value adjustments are due to market factors outside management's control and that is why management prefers funds from operations (FFO)(1). FFO per share was down 24% to $1.88 per share in 2022 compared to $2.46 per share in 2021 correlated with decreased revenue.
Tim Melton, Melcor's Executive Chair and Chief Executive Officer, commented on the year: 'I'm pleased to announce another year of satisfactory results for the company as Melcor enters its 100th year as a real estate focused company. We achieved revenue of $241.75 million and net income of $89.35 million.
Melcor had a successful year, with steady demand in Canadian markets and increased momentum in the Calgary region where two new communities were introduced over the past few years with plans for additional communities to be launched in 2023. The big outlier for the year was the lack of community sales in the US. Community sales revenue in the US is typically characterized by bulk sales agreements, which can result in variability from one period to another, making it challenging to compare results over time.
We completed the sale of 117 residential units in the US, generating cash of $35.00 million (US$26.15 million). These properties were originally purchased between 2010 and 2013 for $11.94 million, which represents a gain of $23.06 million. Subsequent to the year, we returned $24.01 million (US$18.00 million) in cash to Canada to reduce borrowings on our credit facility as we navigate interest rate uncertainty.
Our commercial income divisions, Investment Properties and REIT, contributed $117.12 million in revenue up 4% over the prior year with growth in square footage owned and improved occupancy. Their higher contribution to revenue also improved gross margin for the year to 49% from 44% last year. Investment Properties manages 4.80 million sf of commercial GLA and 476 residential units (including property owned by the REIT). The Recreational Properties division also had a successful year despite weather conditions leading to a shorter golf season than 2021.
In 2022, we increased our dividend 32% to $0.58 per share. We also repurchased the maximum shares allowable under our Normal Course Issuer Bid, thereby reducing shares outstanding by 5% and increasing each shareholders' ownership position marginally.
I am also pleased to announce the appointment of Naomi Stefura as Chief Operating Officer (COO) of the company. Naomi has been an exceptional CFO, and we are confident that she will excel in her new role while concurrently holding her position as CFO. During her 14 year tenure with Melcor, Naomi has demonstrated an unwavering commitment to the company's values, and has gained a deep understanding of the company's operating divisions. She has earned the respect of all stakeholders, including the board, employees, and partners. Naomi's promotion to COO is a testament to her hard work, expertise, and leadership skills. It is my pleasure to work with Naomi, and the entire Melcor team, to achieve our company objectives.
On behalf of the board and all shareholders, I wish to acknowledge the entire Melcor team for their hard work and commitment to serving all company stakeholders and producing good results for the company.
Rising interest rates, combined with general inflation and geopolitical conflict provided some pause in 2022; however, we remain confident that our assets position the company to navigate changing economic times as we have done for the past 100 years.
In closing, Melcor wishes to thank shareholders for their continued support and confidence. We remain committed to protecting and enhancing your investment in the company.'
Today the Board declared a dividend of $0.16 per share, payable on March 31, 2023 to shareholders of record on March 24, 2023. The dividend is an eligible dividend for Canadian tax purposes.
(1) Readers are reminded that established key performance measures may not have standardized meaning under GAAP.