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Terra Firma Capital Corporation Reports 2012 Fourth Quarter and Year End Results

Apr 30 2013 12:00AM

Marketwire

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TORONTO, ONTARIO -- (Marketwired) -- 04/30/13 -- All amounts are stated in Canadian dollars.

Terra Firma Capital Corporation (TSX VENTURE: TII) ("Terra Firma" or the "Company"), a real estate finance company, today released its financial results for the three months and year ended December 31, 2012.

2012 HIGHLIGHTS:

-- Total revenue is $5.5 million, an increase of $3.9 million or 260%, compared to the last year.-- Net income and comprehensive income is $1.3 million, an increase of $964,658 or 336%, compared to last year.-- Total assets increased by 57% to $46.4 million from $29.5 million.



"We have made significant strides in 2012 and we will continue to prudently build on this and expand the Company's presence in the market," commented Dov Meyer, President and Chief Executive Officer. "There are still significant investment opportunities in the market, but we will continue to be prudent in our approach to selection of new investments."

Results of operations - year ended December 31, 2012

Income from continuing operations for the year ended December 31, 2012 increased by 209% to $1.5 million, or $0.05 per basic and diluted share, from $480,164, or $0.03 per basic and diluted share in the previous year.

For the year ended December 31, 2012, interest and fees income grew 281% to $5.2 million compared to $1.4 million in the previous year.

The significant growth in Terra Firma's revenues and income from continuing operations for the year ended December 31, 2012 as compared to the year earlier periods was primarily due to increase in loan and mortgage investments originations. The Company's loan portfolio increased to $32.0 million with a weighted average effective interest rate of 19.9%, at December 31, 2012 compared to $16.7 million with a weighted average effective interest rate of 19.3% at December 31, 2011.

Interest expense for the year ended December 31, 2012 was $2.6 million compared to $457,719 for the year ended December 31, 2011, primarily due to increase in the syndicated portion of the Company's loan and mortgage investments, which increased from $43.8 million at December 31, 2011 to $17.0 million at December 31, 2012 and the issuance of $10.1 million of 3-year, 7% convertible debentures in September 2011. These funding leveraged the Company's shareholders' equity and fueled the growth in loan and mortgage investments, while reducing its overall portfolio risk profile.

Net Income for the year ended December 31, 2012 was $1.3 million, an increase of $964,658 or 336% compared to previous year.

Results of operations - fourth quarter ended December 31, 2012

Income from continuing operations for the three months ended December 31, 2012 was $728,689, an increase of $422,544 or 138% compared to the same period in previous year.

Interest and fees earned for the three months ended December 31, 2012 was $1.9 million compared to $749,883 for the comparable period last year. The increase in interest and fees earned was primarily due to the growth in the Company's loan and mortgage investments with higher weighted average effective interest rate.

Net income for the three months ended December 31, 2012 was $496,376, an increase of $188,303 or 61% from net income of $308,073 in the same period in the previous year.

Termination of Management Agreement

Terra Firma was formerly managed by Counsel Asset Management, L.P., a wholly owned subsidiary of Counsel Corporation (TSX: CXS). Counsel Corporation owned 6,168,333 or approximately 20.2% of the outstanding common shares of Terra Firma as at December 31, 2012. On December 31, 2012, Counsel Asset Management L.P. ended its management of Terra Firma and on January 1, 2013, Counsel distributed its entire holding of Terra Firma shares as a dividend to its shareholders.

Following the termination of the management agreement, the Company's overall strategy remains unchanged and management believes that the Company will be better positioned to deliver on its strategy and objectives with a new manager or alternatively, internalizing the management structure. Management is evaluating both options, among others.

The Company's Management's Discussion & Analysis and Financial Statements as at and for the year ended December 31, 2012 have been filed and are available on SEDAR (www.sedar.com).

About Terra Firma

Terra Firma is a full service, publicly traded real estate finance company that provides customized equity and debt solutions to the real estate industry. Our focus is to arrange and provide financing with flexible terms to property owners looking to improve or add to their existing real estate assets but who may be limited by conventional bank financing, as well as to invest in quality commercial and residential developments by proven real estate developers. Terra Firma offers a full spectrum of real estate financing under the guidance of strict corporate governance, clarity and transparency. For further information please visit Terra Firma's website at www.terrafirmacapital.ca.

This Press Release contains forward-looking statements with respect matters concerning the business, operations, strategy and financial performance of Terra Firma. These statements generally can be identified by use of forward looking word such as "may", "will", "expects", "estimates", "anticipates", "intends", "believe" or "could" or the negative thereof or similar variations. The future business, operations and performance of Terra Firma could differ materially from those expressed or implied by such statements. Such forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Forward-looking statements are based on a number of assumptions which may prove to be incorrect. Additional, important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, local real estate conditions, competition, changes in government regulation, dependence on tenants' financial conditions, interest rates, the availability of equity and debt financing, environmental and tax related matters, and reliance on key personnel. There can be no assurances that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The cautionary statements qualify all forward-looking statements attributable to Terra Firma and persons acting on its behalf. Unless otherwise stated, all forward looking statements speak only as of the date of this Press Release and Terra Firma has no obligation to update such statements except as required by law.

Terra Firma Capital CorporationConsolidated Statements of Income and Comprehensive IncomeFor the three months and year ended December 31, 2012(Unaudited)-------------------------------------------------------------------------------------------------------------------------------------------------------- Three months ended Year ended ------------------------------------------------------- December 31, December 31, December 31, December 31, 2012 2011 2012 2011----------------------------------------------------------------------------Revenue Interest and fees earned $ 1,897,945 $ 749,883 $ 5,156,665 $ 1,352,124 Rental income 195,113 55,305 343,958 174,195---------------------------------------------------------------------------- 2,093,058 805,188 5,500,623 1,526,319Expenses Property operating costs 76,623 17,834 129,186 55,901 General and administrative expenses 134,629 93,829 538,978 245,327 Share based compensation 15,369 32,608 216,840 284,998 Interest expense 888,303 294,562 2,569,006 457,719---------------------------------------------------------------------------- 1,114,924 438,833 3,454,010 1,043,945Fair value adjustment of investment properties - 50,000 - 195,000----------------------------------------------------------------------------Income from continuing operations before income taxes 978,134 416,355 2,046,613 677,374Income tax provision 249,445 110,210 562,320 197,210----------------------------------------------------------------------------Income from continuing operations 728,689 306,145 1,484,293 480,164Income (loss) from discontinued operations (232,313) 1,928 (232,313) (192,842)----------------------------------------------------------------------------Net income and comprehensive income $ 496,376 $ 308,073 $ 1,251,980 $ 287,322--------------------------------------------------------------------------------------------------------------------------------------------------------Basic and dilutedearnings (loss) pershare Continuing operations $ 0.02 $ 0.01 $ 0.05 $ 0.03 Discontinued operations (0.01) - (0.01) (0.01)---------------------------------------------------------------------------- $ 0.01 $ 0.01 $ 0.04 $ 0.02--------------------------------------------------------------------------------------------------------------------------------------------------------Terra Firma Capital CorporationConsolidated Statements of Financial PositionAs at December 31, 2012 and 2011(Unaudited)-------------------------------------------------------------------------------------------------------------------------------------------------------- 2012 2011----------------------------------------------------------------------------AssetsCash and cash equivalents $ 3,223,291 $ 8,771,557Amounts receivable and prepaid expenses 2,396,180 805,412Loan and mortgage investments 31,996,731 16,724,774Investment properties 7,834,576 3,234,658Portfolio investment 950,000 -----------------------------------------------------------------------------Total assets $ 46,400,778 $ 29,536,401--------------------------------------------------------------------------------------------------------------------------------------------------------LiabilitiesAccounts payable and accrued liabilities $ 1,192,616 $ 1,052,582Provision for discontinued operations 445,957 251,864Unearned income 16,965 52,624Income taxes payable 474,297 82,169Deferred income taxes 15,602 10,260Loans and mortgages payable 21,406,070 6,777,907Convertible debentures 10,093,325 10,061,869----------------------------------------------------------------------------Total liabilities 33,644,832 18,289,275----------------------------------------------------------------------------Shareholders' EquityShare capital $ 10,757,405 $ 10,687,105Contributed surplus 573,139 386,599Retained earnings 1,425,402 173,422----------------------------------------------------------------------------Total shareholders' equity 12,755,946 11,247,126--------------------------------------------------------------------------------------------------------------------------------------------------------Total liabilities and Shareholders' Equity $ 46,400,778 $ 29,536,401--------------------------------------------------------------------------------------------------------------------------------------------------------



The TSXV has neither approved nor disapproved the contents of this press release. The TSXV does not accept responsibility for the adequacy or accuracy of this press release.



Contacts:
Terra Firma Capital Corporation
Dov Meyer
President and Chief Executive Officer
416.866.8986
ydmeyer@tfcc.ca

Terra Firma Capital Corporation
Mano Thiyagarajah
Chief Financial Officer
416.866.3168
mthiyagarajah@tfcc.ca
www.terrafirmacapital.ca





Source: Marketwire


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