Melcor Developments Ltd.

March 08, 2011 17:56 ET

Melcor Developments Ltd. Reports Earnings for 2010; 94% Growth in Earnings

EDMONTON, ALBERTA--(Marketwire - March 8, 2011) - Melcor Developments Ltd. (TSX:MRD), an Alberta based public real estate development company, recorded net earnings of $45,056,000 or $1.49 per share (basic) for the twelve months ended December 31, 2010 on revenue of $193,027,000 compared with earnings of $23,224,000 or $0.78 per share (basic) on revenue of $136,608,000 for the same period in 2009. The increase in earnings over 2009 represents 94% growth.

For the three months ended December 31, 2010, earnings were $27,194,000 or $0.90 per share (basic) on revenue of $85,253,000 compared to earnings of $9,918,000 or $0.33 (basic) per share on revenue of $48,872,000 during the same period in the prior year.

The Community Development Division experienced a strong 2010 with revenues exceeding budgets. Total external sales for the Division were $141,875,000 in 2010 versus $91,772,000 in the prior year. This large year-over-year increase is due in part to the recovering economy in 2010, which allowed for builders to work through their existing inventory and acquire new inventory.

Highlights for the year include:

  • Increased net operating income in the Community Development and Investment Property Divisions;
  • The purchase of 653 acres of new land inventory during the year (net of joint venture interests) in Edmonton, Calgary, Red Deer, Lethbridge and Phoenix, Arizona and one major land acquisition of 228 acres in Cochrane, Alberta;
  • The Company entered into three new joint ventures to hold and develop land in Alberta;
  • The Property Development Division completed the construction and leasing of nine buildings totaling 65,800 sq. ft. of income producing properties which were transferred to the Investment Property Division (60,800 sq. ft. net of joint venture interest);
  • Investment property acquisitions included the purchase of a 240-unit residential apartment building in Houston, Texas and additional purchases of residential units adjacent to units previously owned in Phoenix, Arizona;
  • The Company successfully placed mortgage financing of $46 million on existing and constructed investment properties, and assumed mortgage financing of $16 million in the United States; and
  • Subsequent to the fiscal year end, the company successfully issued $40 million in convertible debentures at 6.25%.

Management expects the current cycle of moderate housing demand to continue through 2011 based upon improving, but somewhat restrained, consumer confidence. We forecast that real estate markets will continue to recover in all regions the Company is currently operating in over the next few years. The Company continues to identify and capitalize on opportunities in the marketplace, particularly in the southern United States where we believe the market will recover to normal economic conditions in 3 to 5 years. We are cautiously optimistic that the basic fundamentals of the Alberta economy will have a positive effect on the Company's future growth.

The annual meeting of Melcor Developments Ltd. will be held on April 19, 2011 at the Art Gallery of Alberta, 2 Sir Winston Churchill Square, Edmonton, Alberta, Canada.

Contact Information

  • Melcor Developments Ltd. - Business Contact
    Ralph B. Young
    President & CEO
    (780) 423-6931
    Melcor Developments Ltd. - Investor Relations
    Jonathan Chia, CA
    VP Finance & CFO
    (780) 423-6931