42% GROWTH IN LOANS AND MORTGAGE INVESTMENTS YEAR OVER YEAR
64% GROWTH IN LOAN AND MORTGAGE SYNDICATIONS YEAR OVER YEAR
63% GROWTH IN QUARTERLY REVENUE YEAR OVER YEAR
All amounts are stated in Canadian dollars
TORONTO, March 28, 2019 (GLOBE NEWSWIRE) -- 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 twelve month periods ended December 31, 2018.
FY 2018 Highlights:
- Loan and mortgage investments at December 31, 2018 amounted to $165.9 million, representing an increase of $48.8 million or 42.0% when compared to December 31, 2017.
- Revenues increased by $2.8 million or 18.5% to $17.5 million, compared to $14.7 million last year.
- Loan and mortgage syndications at December 31, 2018 totaled $103.5 million, representing an increase of $40.2 million or 64% when compared to December 31, 2017.
- Net income and comprehensive income attributable to common shareholders increased by 85.4% to $2.8 million, compared to $1.5 million last year. Basic and diluted earnings per share for the year is $0.05, compared to basic and diluted earnings per share of $0.02 last year. Adjusted net income and comprehensive income (a non-IFRS financial measure see “Non-IFRS Financial Measures” below) for the year ended December 31, 2018 amounted to $2.5 million ($0.04 on a basic and diluted per share basis), compared to adjusted net income and comprehensive income of $2.4 million ($0.04 on a basic and diluted per share basis) for the year ended December 31, 2017.
- During the year, the Company repurchased and cancelled 5,236,014 shares for a total cash consideration of $3.1 million (average price of $0.59 per share), compared to 2,391,400 shares repurchased and cancelled for a total cash consideration of $1.6 million (average price of $0.67 per share) during the same period in 2017.
- During the year ended December 31, 2018, the Company provided an allowance for loan and mortgage investments of $3.0 million and an allowance for uncollectible receivables of $186,000, relating to certain loan and mortgage investments that are in arrears, compared to an allowance for loan and mortgage investments of $931,000 and an allowance for uncollectible receivables of $1.6 million for the quarter ended December 31, 2017.
- Book value per share was $0.88 as at December 31, 2018, compared to $0.81 as at December 31, 2017.
Q4 2018 Highlights:
- Revenue for the three months ended December 31, 2018 was $5.0 million, compared to $3.0 million for the same period last year, representing an increase of $1.9 million or 63.0%.
- Interest and financing costs for the three months ended December 31, 2018 was $3.1 million, compared to $1.9 million for the same period last year, representing an increase of $1.2 million or 59.7%.
- Net income and comprehensive income attributable to common shareholders for the three months ended December 31, 2018 was $2.5 million, an increase of $1.6 million, compared to $889,000 for the same period last year. Adjusted net income and comprehensive income (a non-IFRS financial measure, see “Non-IFRS Financial Measures” below) for the three months ended December 31, 2018 amounted to $709,000 ($0.01 on a basic and diluted per share basis), a decrease of $128,000, compared to adjusted net income and comprehensive income of $837,000 ($0.01 on a basic and diluted per share basis) for the same period last year.
- During the three months ended December 31, 2018, the Company provided an allowance for uncollectible receivables of $347,000, relating to certain loan and mortgage investments that are in arrears, compared to an allowance for loan and mortgage investments of $931,000 and an allowance for uncollectible receivables of $1.6 million for the three months ended December 31, 2017.
“We are very pleased with the progress that the Company has made over the course of 2018. Our loan investments and syndications grew by 40% over the year to a new record high, and our syndications grew by 64% over the year also reaching new record highs. The resulting yields and related spreads will have a continued inherent positive effect on our earnings per share. We were also able to secure a new US line of credit with Texas Capital Bank which will help to fund future asset growth at rates that will further enhance our yields. The Company continued its expansion into the U.S. with 86% of its investment portfolio in projects located in the U.S. as at year end and continued to improve the quality of its investment portfolio with 86% in 1st mortgages as at year end,” commented Glenn Watchorn, President and Chief Executive Officer of Terra Firma Capital Corporation. “Given the quality of our portfolio and the Company’s potential for continued growth both in assets and earnings, the Company has been buying back its shares at steep discounts to the book value which was at $0.88 per share at year end. We expect to continue to repurchase our shares pursuant to the normal course issuer bid so long as they remain such a bargain.”
Results of operations
Revenue for the three months ended December 31, 2018 totaled $5.0 million, compared to revenue for the three months ended December 31, 2017 of $3.0 million, representing an increase of $1.9 million on a year-over-year basis. Revenue for the year ended December 31, 2018 totaled $17.5 million, compared to revenue for the year ended December 31, 2017 of $14.7 million, representing an increase of $2.8 million on a year-over-year basis.
Interest and fee income for the three months ended December 31, 2018 aggregated to $4.9 million, an increase of $1.9 million compared to the $3.0 million in the same period in the previous year. Interest and fee income for the year ended December 31, 2018 aggregated to $17.3 million compared to interest and fee income for the year ended December 31, 2017 of $14.5 million, representing an increase of $3.0 million over last year.
Interest and financing expense for the three months ended December 31, 2018 and 2017 were $3.1 million and $1.9 million, respectively. Interest expense for the year ended December 31, 2018 was $10.3 million, compared to $8.6 million for the year ended December 31, 2017.
During the quarter ended December 31, 2018, the Company provided an allowance for uncollectible receivables of $347,000, relating to certain loan and mortgage investments in arrears.
Net income and comprehensive income attributable to common shareholders for the three months ended December 31, 2018 was $2.5 million or $0.04 per basic and diluted share compared to $889,000 or $0.01 per basic and diluted share for the same period last year. Net income and comprehensive income attributable to common shareholders for the year ended December 31, 2018 was $2.8 million or $0.05 per basic and diluted share compared to $1.5 million or $0.02 per basic share and diluted share for the year ended December 31, 2017.
General and administrative expenses for the year ended December 31, 2018 was $3.6 million compared to $3.3 million for the year ended December 31, 2017.
The principal balance of the Company’s loan and mortgage investments (net of allowance for credit losses) increased from $117.1 million at December 31, 2017 to $165.9 million at December 31, 2018, an increase of 42.0%, primarily due to funding of loan and mortgage investments of $79.7 million, which increase was partially offset by repayments of $38.0 million. The weighted average effective interest rate of the mortgage investment portfolio at December 31, 2018 was 13.7% compared to 14.1% at December 31, 2017.
The principal balance of the Company’s loan and mortgage syndications increased from $63.3 million at December 31, 2017 to $103.5 million at December 31, 2018, an increase of $40.2 million or 63.5%. The weighted average effective interest rate of the loan and mortgage syndications at December 31, 2018 and 2017 was 10.2%.