EDMONTON, ALBERTA -- (Marketwired) -- 05/09/14 --
Melcor earned net income of $6.86 million or $0.22 per share (basic) in Q1-2014, compared to $12.62 million and $0.42 per share (basic) in Q1-2013. Adjusted earnings, which reflect our proportionate interest in the earnings for the REIT, were $9.77 million, a decrease of 22.6% over Q1-2013. Management believes that adjusted earnings are a more accurate measure of operational and relative performance.
Funds from operations (FFO) was $0.20 per share in Q1-2014 compared to $0.31 per share in Q1-2013. FFO per share adjusts for all non-cash earnings items included in income such as fair value adjustments on investment properties and stock-based compensation expense.
Brian Baker, Melcor's President and Chief Executive Officer commented on the quarter: "We are pleased with our Q1-2014 results. All operating divisions are experiencing strong activity and we continue to execute successfully on our business plan. We have grown our asset base both organically, through third-party acquisition and via the synergies between Melcor and Melcor REIT. We remain focused on obtaining planning approvals required for future projects and we are well positioned for the 2014 construction season.
We remain confident in the year ahead and have increased our semi-annual dividend by 12% to $0.28 per share."
First Quarter Highlights
-- Community Development revenues declined versus the comparative period due to the timing of plan registrations and commercial and multi-family land sales. Results remain on budget for 2014 and development activity is strong, with 38 projects presently under active development. -- Investment Property revenue increased as a result of 71% growth in portfolio gross leasable area (GLA). Melcor REIT revenue also grew as a result of growth in portfolio GLA. -- Melcor REIT completed its third property acquisition since IPO with the purchase of LC Industrial, a 67,610 sq. ft. industrial warehouse in Lethbridge, Alberta, for $5.93 million. -- Melcor REIT paid distributions of $0.05625 per trust unit in January, February and March. Distributions made during each of the eleven months of the REIT's operations represent a payout ratio of 88%. -- Subsequent to the quarter, the REIT completed an offering of 1.9 million trust units for gross proceeds of $20.24 million. Part of these proceeds were used to purchase two properties from Melcor in exchange for $7.40 million in Class B LP Units and $6.10 million in cash. -- We continued to invest in portfolio growth in our Investment Properties and land inventory in the Community Development division. Subsequent to the quarter, the following deals closed: -- Investment Properties acquired two commercial properties in Arizona for $11.11 million. The office buildings have a total of 59,220 sq. ft. of GLA. -- Community Development purchased 73.86 acres in Calgary and 36.91 acres in Lethbridge. -- On May 9, 2014 we declared a semi-annual dividend of $0.28 per share, payable on June 30, 2014 to shareholders of record on June 16, 2014. The dividend is an eligible dividend for Canadian tax purposes.