SOURCE: Gendis Inc.

Gendis Inc.

June 09, 2017 16:42 ET

Gendis Inc. Announces First Quarter Earnings

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

Contact Information

  • 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