Home Business News Terra Firma Capital Company Experiences Fourth Quarter & Full Yr 2022 Monetary Outcomes

Terra Firma Capital Company Experiences Fourth Quarter & Full Yr 2022 Monetary Outcomes

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Terra Firma Capital Company Experiences Fourth Quarter & Full Yr 2022 Monetary Outcomes

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All quantities are said in United States {dollars} except in any other case indicated.

TORONTO, April 25, 2023 (GLOBE NEWSWIRE) — Terra Firma Capital Company (TSX-V: TII) (“Terra Firma” or the “Firm“), an actual property finance firm, as we speak introduced its monetary outcomes for the three months and yr ended December 31, 2022.

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Full Yr 2022 Monetary Highlights:

  • Whole Belongings of $151.4 million
  • Whole Investments (a supplementary monetary measure)(4) of $127.3 million
  • Whole Belongings underneath administration (“AUM,” a non-IFRS monetary measure) (3) of $132.9 million
  • Future funding commitments of $109.0 million
  • Ebook Worth per share elevated by 1.0% to $7.91 (CA$10.71 translated to CA$ utilizing the trade price of $1.3544) per share
  • CA$0.06 per share paid in dividends
  • Whole Income decreased by 7.0% to $15.1 million
  • Internet revenue and complete revenue of $1.5 million, a lower of 54.5%
  • Adjusted internet revenue and complete revenue (a non-IFRS monetary measure)(1) decreased by 39.7% to $1.6 million
  • Primary and diluted earnings per share decreased by 55.0% and 54.2%, respectively, to $0.27 (CA$0.35, translated to CA$ utilizing the trade price of $1.3011).
  • Adjusted fundamental and diluted earnings per share (a non-IFRS monetary measure)(2) decreased by 39.6%, to $0.29 (CA$0.38, translated to CA$ utilizing the trade price of $1.3011).

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This autumn 2022 Monetary Highlights:

  • Whole Income decreased by 13.7% to $3.7 million
  • Internet revenue and complete revenue of $0.2 million, a lower of 83.8%
  • Adjusted internet revenue and complete revenue (a non-IFRS monetary measure)(1) decreased by 80.5% to $0.1 million
  • Primary and diluted earnings per share decreased by 84.0% and 83.3%, as in comparison with This autumn 2021, to $0.04 (CA$0.05, translated to CA$ utilizing the trade price of $1.3578)
  • Adjusted fundamental and diluted earnings per share (a non-IFRS monetary measure)(2) decreased by 80.0%, as in comparison with This autumn 2021, to $0.02 (CA$0.03, translated to CA$ utilizing the trade price of $1.3578)

“Throughout the fourth quarter, Terra Firma introduced its plans to overview its strategic alternate options with a purpose to maximize shareholder worth and liquidity. Because of the choice to discover strategic alternate options, the Firm paused originations of recent loans (continues to fund current commitments) and stays targeted on steadiness sheet liquidity and asset administration. Whereas this has impacted its income, all of Terra Firma’s investments are performing properly and are in full compliance to this point,” commented Glenn Watchorn, President and CEO of Terra Firma. “The Firm has retained Cormark Securities as an exterior advisor to help within the overview of strategic alternate options and is optimistic that this course of will generate the absolute best end result for its shareholders,” he additional mentioned.

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Internet revenue and complete revenue for the fourth quarter of 2022 was $0.2 million in contrast with $1.4 million in the identical interval within the prior yr, representing a lower of $1.2 million. Internet revenue and complete revenue for the yr ended December 31, 2022, was $1.5 million as in comparison with $3.3 million within the prior yr, representing a lower of $1.8 million. Total, internet revenue and complete revenue was impacted by the Firm’s shift to fund administration requiring it to direct sure of its investments to the Funds till the Funds are absolutely invested. This has resulted within the Firm’s improve in money and obtainable credit score, leading to decrease internet revenue and complete revenue over the intervals. Moreover, the variance in internet revenue and complete revenue for the three months and yr ended December 31, 2022, was additionally impacted by the Firm’s resolution to pause enterprise originations because the Firm explores strategic alternate options.

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The Firm reported complete income of $3.7 million within the fourth quarter of 2022, as in comparison with $4.3 million in the identical interval within the prior yr, representing a lower of $0.6 million. Income for the yr ended December 31, 2022, was $15.1 million, as in comparison with $16.2 million in the identical interval within the prior yr, representing a lower of $1.1 million. The lower in complete income was resulting from sure mortgage and mortgage investments being partially or absolutely repaid leading to a lower in curiosity and charges for the present interval. Partially offsetting the lower was a rise in finance revenue associated to the Firm’s shift to land banking transactions (funding in finance leases) because of the Firm’s shift in focus from acquisition and growth loans to land banking preparations with massive private and non-private homebuilders.

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Normal and administrative bills include salaries and different personnel prices, skilled charges, occupancy prices and different bills related to the operation of the Firm. Normal and administrative bills for the three months ended December 31, 2022, have been $1.0 million in contrast with $1.4 million for a similar interval within the prior yr. The interval over interval variance typically and administrative bills was primarily resulting from a lower in skilled charges and wage and advantages. The lower in skilled charges was primarily resulting from decrease authorized charges and consulting charges recorded within the fourth quarter of 2022 in comparison with the prior interval. The lower in wage and advantages was resulting from a lower in incentive compensation recorded within the fourth quarter of 2022 in comparison with the identical interval within the prior yr.

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Normal and administrative bills for the yr ended December 31, 2022, decreased to $4.1 million in contrast with $4.2 million within the prior yr. The variance typically and administrative bills was primarily because of the above famous lower in skilled charges and wage and advantages. Partially offsetting the lower was the rise in different bills associated to the Firm incurring increased short-term contract personnel prices and a rise in journey bills in contrast with the prior yr.

Market uncertainty continued within the fourth quarter of 2022, nonetheless, the Firm’s investments haven’t been impacted by these market occasions as debtors continued to carry out in compliance with their agreements which included common funding and reimbursement of its numerous mortgage and mortgage funding and land banking transactions. The Firm believes its portfolio will proceed to carry out and is properly positioned resulting from key elements akin to: fascinating areas in high-growth U.S. markets with sturdy housing fundamentals, deal with reasonably priced market-rate properties for entry-level patrons and robust relationships with skilled builders and builders. Throughout the fourth quarter of 2022, the Firm funded $15.4 million and acquired repayments of $11.7 million associated to its funding portfolio and continues to obtain partial and full repayments in accordance with the agreements.

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Over the course of the previous 24 months, the Firm has dedicated to roughly $215.0 million in new transactions which are nonetheless within the means of being funded. With this vital improve in originations, which have been primarily land banking transactions, the Firm’s steadiness sheet is absolutely dedicated to supply, together with Debt Fund I and Debt Fund II, for future funding commitments of $109.0 million as at December 31, 2022. Subsequent to the yr ended December 31, 2022, future funding commitments have decreased to $90.1 million. The Firm manages future funding commitments by way of forecasting money circulate from operations and contemplating obtainable capital from its personal steadiness sheet in addition to exterior managed capital. The Firm expects to satisfy these future funding commitments utilizing money readily available, capital obtainable from its line of credit score, proceeds from repayments of investments in addition to capital obtainable inside Debt Fund I and Debt Fund II.

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As a part of the overview of strategic alternate options, the Firm will consider the total vary of alternate options which can embrace a sale, merger, privatization, liquidation, or persevering with operations. There could be no assurance that the strategic overview course of will lead to any strategic different being chosen, or any assurance as to its end result or timing. The Firm has not set a timetable for completion of the overview course of and doesn’t intend to reveal developments associated to the method except and till the Firm executes a definitive settlement with respect thereto, or it in any other case determines that additional disclosure is acceptable or required.

The Firm’s Administration’s Dialogue & Evaluation and Monetary Statements as at and for the three months and yr ended December 31, 2022, have been filed and can be found on SEDAR (www.sedar.com).

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About Terra Firma

Terra Firma is a full service, publicly traded actual property finance firm that gives actual property financings secured by funding properties and actual property developments in Canada and all through the USA. The Firm focuses on arranging and offering financing with versatile phrases to actual property builders and house owners who require shorter-term loans to bridge a transitional interval of 1 to 5 years the place they require capital at numerous phases of growth or redevelopment of a property. These loans are usually repaid with decrease value, longer-term debt obtained from different Canadian monetary establishments as soon as the relevant transitional interval is over or the redevelopment is full or from proceeds generated from the sale of the true property property. Terra Firma gives a full spectrum of actual property financing underneath the steerage of strict company governance, readability and transparency. For additional info, please go to Terra Firma’s web site at www.tfcc.ca.

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Non-IFRS And Different Supplementary Monetary Measures

On this press launch, as a complement to outcomes supplied in accordance with IFRS, the Firm discloses sure monetary measures not acknowledged underneath Worldwide Monetary Reporting Requirements (“IFRS”) as prescribed by the Worldwide Accounting Requirements Board, which would not have normal meanings prescribed by IFRS (collectively the “non‐IFRS monetary measures”). These non‐IFRS and different supplementary monetary measures are additional described under.

Non-IFRS Monetary Measures

(1) Adjusted internet revenue and complete revenue in addition to adjusted internet revenue and complete revenue attributable to widespread shareholders, for the said interval, are calculated by adjusting the online revenue and complete revenue for the next (as relevant and collectively known as different non-operating objects), regardless of materiality:

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  • overseas trade positive factors/losses associated to the Firm’s non-functional forex denominated internet property;
  • impairment losses/reversals;
  • internet positive factors/losses on the disposal of equity-accounted investments;
  • share-based compensation;
  • non-recurring objects;
  • severance value; and
  • the revenue tax affect of the objects listed above.
                 
    Three months ended     Years ended  
    December 31,
2022
  December 31,
2021
  Change
Enhance /
(lower)
    December 31,
2022
  December 31,
2021
  Change
Enhance /
(lower)
 
                 
Internet revenue and complete revenue $ 222,200   $ 1,370,507   $ (1,148,307 )   $ 1,521,237   $ 3,340,552   $ (1,819,315 )
                 
  Restoration of mortgage and mortgage funding, funding in finance leases and uncollectible receivable losses (tax adjusted)   (177,065 )   (565,094 )   388,029       (217,552 )   (443,776 )   226,224  
  Truthful worth adjustment – portfolio funding (tax adjusted)       (178,320 )   178,320       (673,236 )   (178,320 )   (494,917 )
  Share based mostly compensation (restoration) (tax adjusted)   117,505     (82,930 )   200,435       (71,520 )   93,382     (164,902 )
  International trade (achieve) loss (tax adjusted)   (50,924 )   27,795     (78,719 )     686,924     (112,875 )   799,799  
  Severance accrual (tax adjusted)                 381,128         381,128  
Adjusted internet revenue and complete revenue (1) $ 111,716   $ 571,958   $ (460,242 )   $ 1,626,981   $ 2,698,963   $ (1,071,983 )
(1) Adjusted internet revenue and complete revenue is a Non-IFRS Monetary Measure. See “Non-IFRS Monetary Measures”.  

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(2) Adjusted earnings per share is adjusted internet revenue and complete revenue divided by the weighted common variety of excellent shares and adjusted internet revenue and complete revenue divided by the weighted common variety of diluted shares excellent.

(3) AUM are the property managed by the Firm on behalf of the Firm’s syndicate buyers, in addition to the Firm’s property, and don’t embrace capital commitments that haven’t but been funded.

       
    December 31,
2022
  December 31,
2021
 
       
Mortgage and mortgage investments   $ 46,162,027   $ 47,089,194  
Funding in finance leases     67,847,493     55,849,312  
Portfolio investments     932,093     676,421  
Funding in associates (1)     1,753,807     2,174,527  
Funding property held in Joint Operations     1,636,518     1,747,799  
Convertible observe receivable     1,511,101     1,572,510  
Syndicates buyers’ share of funding     13,087,375     13,224,860  
Whole AUM   $ 132,930,414   $ 122,334,623  
(1) Funding in associates consists of funding in Lan Partnership and TFCC Royal Palm Seaside Inc.    

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These non-IFRS monetary measures usually are not outlined by IFRS, would not have a standardized which means, and will not be comparable with related measures offered by different issuers. The Firm has offered such non‐IFRS monetary measures which have been derived from the Firm’s monetary statements and utilized on a constant foundation as a result of the Firm believes they’re of help in evaluating the underlying operational and monetary efficiency of the Firm. Non-IFRS monetary measures are additionally generally utilized by the monetary neighborhood to research and examine the efficiency of firms engaged in the identical industries. These non‐IFRS monetary measures shouldn’t be construed as alternate options to monetary measures decided in accordance with IFRS as indicators of the Firm’s efficiency.

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Supplementary Monetary Measures

(4) Whole Investments (excluding money) consists of the mortgage and mortgage investments, funding in finance leases, portfolio investments, investments in associates, convertible observe receivable and an funding property held in joint operations.

Word that additional info regarding such non-IFRS and supplementary monetary measures could be discovered within the Firm’s Administration’s Dialogue & Evaluation for the three months and yr ended December 31, 2022.

The TSX-V has neither accredited nor disapproved the contents of this press launch. The TSX-V doesn’t settle for duty for the adequacy or accuracy of this press launch.

Ahead-Wanting Data

This Press Launch comprises aheadwanting statements with respect to issues in regards to the enterprise, operations, technique and monetary efficiency of Terra Firma, and embrace statements regarding Terra Firma’s strategy to choosing new investments and pricing, the anticipated timing of elevated readability with housing and land market valuations, efficiency of Terra Firma’s investments by way of present market uncertainty, statements concerning the technique overview course of, in addition to future funding commitments and their deployment. These statements typically could be recognized by use of forward-looking phrase akin to “might”, “will”, “expects”, “estimates”, “signifies” “anticipates”, “intends”, “consider”, “ought to” or “may” or the destructive thereof or related variations. The long run enterprise, operations and efficiency of Terra Firma may differ materially from these expressed or implied by such statements. Such aheadwanting statements are certified of their entirety by the inherent dangers and uncertainties surrounding future expectations, together with the issues coated by any non-binding
letters of intent that aren’t accomplished,
in addition to dangers referring to market elements, competitors, and dependence on tenants’ monetary situations, environmental and tax associated issues, and reliance on key personnel, in addition to the dangers mentioned in Terra Firma’s most just lately filed annual Administration’s Dialogue and Evaluation, any subsequently filed interim Administration’s Dialogue and Evaluation or Terra Firma’s most just lately filed Annual Data Type. Aheadwanting statements are based mostly on various assumptions which can show to be incorrect, together with the power of the Firm to adapt to any modifications in authorities regulation and/or financial situations; and the continued availability of fairness and debt financing, and the dangers referenced above. There could be no assurances that aheadwanting statements will show to be correct, as precise outcomes and future occasions may differ materially from these anticipated in such statements. Accordingly, readers shouldn’t place undue reliance on aheadwanting statements. The cautionary statements qualify all aheadwanting statements attributable to Terra Firma and individuals performing on its behalf. Except in any other case said, all ahead wanting statements converse solely as of the date of this Press Launch and Terra Firma doesn’t assume any obligation to replace such statements, whether or not on account of new info, future occasions or in any other case, besides as required by relevant Canadian securities legal guidelines.

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For additional info, please contact:

Terra Firma Capital Company
Glenn Watchorn
Chief Government Officer
Cellphone: 416.792.4702
gwatchorn@tfcc.ca

or

Terra Firma Capital Company
Y. Dov Meyer
Government Chairman
Cellphone: 416.792.4709
ydmeyer@tfcc.ca

or

Ali Mahdavi
Managing Director
Spinnaker Capital Markets Inc.
Cellphone: 416.962.3300
am@spinnakercmi.com


Terra Firma Capital Company

Consolidated Statements of Earnings and Complete Earnings
For the three months and years ended December 31, 2022 and 2021

                 
      Three months ended   Years ended  
      December 31,
2022
December 31,
2021
  December 31,
2022
December 31,
2021
 
Income            
  Curiosity and charges $ 1,516,020   $ 2,730,395     $ 6,719,325   $ 11,180,082    
  Finance revenue   2,171,933     1,547,442       8,213,979     4,889,886    
  Rental   41,724     41,930       169,335     171,191    
        3,729,677     4,319,767       15,102,639     16,241,159    
Bills            
  Property working prices   16,884     13,113       60,409     58,013    
  Normal and administrative   1,030,598     1,397,956       4,071,989     4,228,189    
  Severance             524,577        
  Share based mostly compensation (restoration)   159,871     (112,829 )     (97,306 )   127,051    
  Curiosity and financing prices   2,621,248     2,180,521       9,531,660     8,588,981    
  Restoration of mortgage and mortgage funding loss   (208,568 )   (527,837 )     (243,412 )   (683,159 )  
  Allowance for (restoration of) for funding in finance lease loss     (32,336 )   (231,222 )     (52,577 )   79,382    
  Restoration of uncollectible receivables       (9,776 )            
  Truthful worth adjustment – convertible observe receivable   128,364           128,364        
  Truthful worth adjustment – portfolio funding       (205,556 )     (776,065 )   (205,556 )  
  Realized and unrealized overseas trade (achieve) loss   139,662     (20,337 )     53,531     (147,243 )  
  Most well-liked return from portfolio funding   (37,565 )   (54,285 )     (37,565 )   (54,285 )  
  Share of (revenue) loss from funding in associates   (144,625 )   63,137       (811,433 )   (221,978 )  
        3,673,533     2,492,885       12,352,172     11,769,395    
                 
Earnings from operations earlier than revenue taxes   56,144     1,826,882       2,750,467     4,471,764    
                 
Earnings taxes (restoration)   (166,056 )   456,375       1,229,230     1,131,212    
                 
Internet revenue and complete revenue $ 222,200   $ 1,370,507     $ 1,521,237   $ 3,340,552    
                 
Earnings per share            
  Primary $ 0.04   $ 0.25     $ 0.27   $ 0.60    
  Diluted $ 0.04   $ 0.24     $ 0.27   $ 0.59    
                 

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Terra Firma Capital Company
Consolidated Statements of Monetary Place
As at December 31, 2022 and 2021

         
    December 31,
2022
  December 31,
2021
   
         
Belongings      
         
  Money and money equivalents $ 16,636,083   $ 18,107,159    
  Funds held in belief   5,960,395     3,971,799    
  Quantities receivable and pay as you go bills   916,225     817,558    
  Mortgage and mortgage investments   46,111,079     47,007,834    
  Funding in finance lease   67,779,627     55,728,869    
  Portfolio investments   932,093     676,421    
  Funding in associates   9,228,257     8,364,711    
  Funding property held in joint operations   1,636,518     1,747,799    
  Convertible observe receivable   1,511,101     1,572,510    
  Proper of use asset   596,603     851,833    
  Earnings taxes recoverable   67,571     459,474    
  Deferred revenue tax asset   21,085        
         
Whole property $ 151,396,637   $ 139,305,967    
         
Liabilities      
         
  Unearned revenue   669,950     373,622    
  Mortgage and mortgage syndications   16,034,041     22,043,144    
  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 score services   (50,000 )   (115,321 )  
  Unsecured observe payable       289,744    
  Lease obligations   633,326     881,314    
  Deferred revenue tax liabilities       388,890    
Whole liabilities   107,251,801     95,726,747    
         
Fairness      
         
  Share capital $ 25,364,104   $ 25,293,007    
  Contributed surplus   3,607,129     3,617,372    
  International forex translation reserve   (6,885,398 )   (6,885,398 )  
  Retained earnings   22,059,001     21,554,239    
  Whole fairness   44,144,836     43,579,220    
         
Whole liabilities and fairness $ 151,396,637   $ 139,305,967    
         

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