This press release contains forward-looking information that is based upon assumptions and is subject to risks and uncertainties as indicated in the cautionary note contained within this press release.
TORONTO, May 14, 2019 (GLOBE NEWSWIRE) -- Dream Unlimited Corp. (TSX: DRM and DRM.PR.A) (“Dream”, “the Company” or “we”) today announced its financial results for the three months ended March 31, 2019. Basic earnings per share (“EPS”) for the three months ended March 31, 2019 was $0.17, down slightly from $0.22 in the comparative quarter on a standalone basis, which excludes operational income generated from Dream Hard Asset Alternatives Trust (TSX: DRA.UN) (“Dream Alternatives”). At March 31, 2019, Dream’s total equity, on a standalone basis, increased to $9.47 per share, up 8% from $8.75 per share one year ago(1).
"Our underlying operational results were solid for a quarter which is typically our quietest” said Michael Cooper, President & Chief Responsible Officer of Dream. “As a significant portion of our development pipeline is in the planning or pre-development stages, the financial results for 2019 will not easily reflect the progress we are making towards creating and owning best in class assets. Nonetheless, we are extremely pleased with the advancements we are making. Dream is the largest unitholder of both Dream Office REIT and Dream Alternatives, both of which are focused on owning and developing core assets predominately in Toronto. With the execution of a new shared services agreement with Dream Office REIT, we are now developing properties on behalf of Dream Office REIT and Dream Alternatives, which further adds to the exceptional asset pipeline in Toronto. ”
A summary of our results for the three months ended March 31, 2019 is included in the table below.
Three months ended March 31, | |||||
(in thousands of Canadian dollars, except per share amounts) | 2019 | 2018 | |||
Consolidated Dream (including Dream Alternatives): | |||||
Revenue | $ | 56,957 | $ | 59,821 | |
Net margin | $ | 18,968 | $ | 15,789 | |
Net margin %(2) | 33.3% | 26.4% | |||
Earnings (loss) before income taxes | $ | (36,591) | $ | 151,397 | |
Earnings (loss) for the period | $ | (33,524) | $ | 147,058 | |
Basic earnings (loss) per share(4) | $ | (0.31) | $ | 1.35 | |
Diluted earnings (loss) per share | $ | (0.31) | $ | 1.30 | |
Dream Standalone(5): | |||||
Revenue | $ | 45,850 | $ | 49,635 | |
Net margin | $ | 14,204 | $ | 11,327 | |
Net margin %(2) | 31.0% | 22.8% | |||
Earnings before income taxes | $ | 23,690 | $ | 29,485 | |
Earnings for the period | $ | 18,466 | $ | 24,028 | |
EBITDA(3) | $ | 32,900 | $ | 37,127 | |
Adjusted EBITDA(3) | $ | 21,427 | $ | 14,957 | |
Basic earnings per share(4) | $ | 0.17 | $ | 0.22 | |
Diluted earnings per share | $ | 0.17 | $ | 0.22 | |
Dream Standalone(5): | March 31, 2019 | December 31, 2018 | |||
Total assets | $ | 2,103,258 | $ | 2,056,028 | |
Total liabilities | $ | 1,041,950 | $ | 1,010,776 | |
Total equity (excluding non-controlling interest)(1) | $ | 1,014,411 | $ | 1,001,317 | |
Total equity per share(1) | $ | 9.47 | $ | 9.33 |
(1) | Total equity (excluding non-controlling interests) and total equity per share excludes $46.9 million of non-controlling interest as at March 31, 2019 ($43.9 million as at December 31, 2018) and includes the Company’s investment in Dream Alternatives as at March 31, 2019 and December 31, 2018 of $77.2 million and $72.7 million, respectively. For further details refer to pages 23 and 24 in our management’s discussion and analysis (“MD&A”) for the three months ended March 31, 2019. |
(2) | Net margin % (see the “Non-IFRS Measures” section of our MD&A for the three months ended March 31, 2019) represents net margin as a percentage of revenue. |
(3) | EBITDA and adjusted EBITDA (see the “Non-IFRS Measures” section of our MD&A for the three months ended March 31, 2019) is calculated as earnings before interest, taxes, depreciation, amortization, fair value changes in investment properties and financial instruments, and share of equity accounted earnings from Dream Office REIT offset by distributions received from the Dream Publicly Listed Funds. |
(4) | Basic EPS is computed by dividing Dream’s earnings attributable to owners of the parent by the weighted average number of Class A Subordinate Voting Shares and Class B common shares outstanding during the period. Refer to Management’s discussion below on consolidated results for the three months ended March 31, 2019. |
(5) | Dream standalone represents the standalone results of Dream, excluding the impact of Dream Alternatives’ consolidated results. Refer to the “Non-IFRS Measures” section of our MD&A for further details. Total assets as at March 31, 2019 and December 31, 2018 includes approximately $77.2 million and $72.7 million, respectively, relating to the Company’s investment in Dream Alternatives. |
In the three months ended March 31, 2019, on a consolidated basis the Company recognized a loss of $33.5 million, down from income of $147.1 million in the comparative prior year period. Results in the comparative period included a one-time net gain on acquisition of Dream Alternatives of $130.0 million. Current period results included fair value losses on the Dream Alternatives trust units of $61.9 million which are fair valued each period under IFRS and were generated as a result of an increase in the Trust’s unit price of 15% since December 31, 2018. Excluding these non-cash items, results were more comparable year-over-year.
In the three months ended March 31, 2019, the Company recognized earnings before income taxes on a standalone basis of $23.7 million, a decrease of $5.8 million from the prior year due to increased interest expense of $1.5 million and a one-time net gain on acquisition of Dream Alternatives in the comparative period of $12.6 million. This was partially offset by fair value gains on financial instruments as a result of an increase in the unit price of Dream Global REIT relative to the prior year.
Adjusted EBITDA is calculated on a standalone basis using earnings for the period adjusted for interest and income tax expense, depreciation and amortization, fair value changes and the net distribution component of income from the Company’s investment in Dream Office REIT. It is an important measure for the Company as it eliminates the impact of significant non-cash items from earnings. Adjusted EBITDA for the three months ended March 31, 2019 was $21.4 million, an increase of $6.5 million relative to the prior year primarily due to increased contribution from our asset management segment, improved net operating income from Arapahoe Basin, our ski area in Colorado, and growth in distributions from the Dream Publicly Listed Funds due to additional units acquired since the comparative period.
Effective this quarter we have redefined our segment information to better reflect how we view and manage our business. Our operating results have been defined as follows:
Asset Management and Investments in Dream Publicly Listed Funds
Key Results Highlights: Stabilized Income Generating Assets
Key Results Highlights: Urban Development – Toronto & Ottawa
Key Results Highlights: Western Canada Development
Strong Liquidity Position, NCIB Activity & Return to Shareholders
Select financial operating metrics for Dream’s segments for the three months ended March 31, 2019 are summarized in the table below.
Three months ended March 31, 2019 | ||||||||||||
(in thousands of dollars) | Asset management | Stabilized income generating assets | Urban development | Western Canada community development | Corporate and other | Total Dream standalone | ||||||
Revenue(1) | $ | 12,935 | $ | 24,138 | $ | 1,269 | $ | 7,508 | $ | — | $ | 45,850 |
% of total revenue(1) | 28.2% | 52.6% | 2.8% | 16.4% | —% | 100.0% | ||||||
Net margin(1) | $ | 8,742 | $ | 9,778 | $ | (1,659) | $ | (2,657) | $ | — | $ | 14,204 |
Net margin (%)(2) | 67.6% | 40.5% | n/a | n/a | n/a | 31.0% | ||||||
% of net margin(1) | 61.5% | 68.8% | (11.7%) | (18.6%) | —% | 100.0% | ||||||
EBITDA(2) | $ | 28,163 | $ | 8,777 | $ | (875) | $ | 405 | $ | (3,570) | $ | 32,900 |
Adjusted EBITDA(2) | $ | 16,774 | $ | 11,234 | $ | (837) | $ | (2,114) | $ | (3,630) | $ | 21,427 |
As at March 31, 2019 | ||||||||||||
Segment assets(1) | $ | 574,346 | $ | 341,594 | $ | 376,011 | $ | 790,633 | $ | 20,674 | $ | 2,103,258 |
Segment liabilities(1) | $ | 112,661 | $ | 133,313 | $ | 208,071 | $ | 186,422 | $ | 401,483 | $ | 1,041,950 |
Segment shareholders’ equity(1) | $ | 461,685 | $ | 208,281 | $ | 121,043 | $ | 604,211 | $ | (380,809) | $ | 1,014,411 |
Book equity per share(2) | $ | 4.31 | $ | 1.94 | $ | 1.13 | $ | 5.64 | $ | (3.55) | $ | 9.47 |
Three months ended March 31, 2018 | ||||||||||||
(in thousands of dollars) | Asset management | Stabilized income generating assets | Urban development | Western Canada community development | Corporate and other | Total Dream standalone | ||||||
Revenue(1) | $ | 10,050 | $ | 22,670 | $ | 2,380 | $ | 14,535 | $ | — | $ | 49,635 |
% of total revenue(1) | 20.2% | 45.7% | 4.8% | 29.3% | —% | 100.0% | ||||||
Net margin(1) | $ | 7,116 | $ | 8,831 | $ | (933) | $ | (3,687) | $ | — | $ | 11,327 |
Net margin (%)(2) | 70.8% | 39.0% | n/a | n/a | n/a | 22.8% | ||||||
% of net margin(1) | 62.8% | 78.0% | (8.2%) | (32.6%) | —% | 100.0% | ||||||
EBITDA(2) | $ | 35,040 | $ | 9,224 | $ | (559) | $ | (2,998) | $ | (3,580) | $ | 37,127 |
Adjusted EBITDA(2) | $ | 12,334 | $ | 8,975 | $ | (261) | $ | (3,080) | $ | (3,011) | $ | 14,957 |
(1) | This metric is calculated on a Dream standalone basis. Refer to the “Non-IFRS Measures” section of our MD&A for further details. |
(2) | Net margin (%), EBITDA and adjusted EBITDA are non-IFRS measures. Refer to the "Non-IFRS Measures" section of our MD&A for further details, including a reconciliation of EBITDA and adjusted EBITDA to net segment earnings. |
Other Information
Information appearing in this press release is a select summary of results. The financial statements and MD&A for the Company are available at www.dream.ca and on www.sedar.com.
Annual Meeting of Shareholders
Senior management will host its Annual Meeting of Shareholders on May 16, 2019 at 9 a.m. (ET), located at the Hockey Hall of Fame, TSN Theatre (concourse level), Brookfield Place, 30 Yonge Street, Toronto, Ontario. For further details, please visit Dream’s website at www.dream.ca and click on the link for News and Events, then click on Calendar of Events.
About Dream Unlimited Corp.
Dream is one of Canada’s leading real estate companies with over $15 billion of assets under management in North America and Europe. The scope of the business includes asset management and management services for four Toronto Stock Exchange ("TSX") listed trusts and institutional partnerships, condominium and mixed-use development, investments in and management of a renewable power portfolio, commercial property ownership, residential land development, and housing and multi-family development. Dream has an established track record for being innovative and for its ability to source, structure and execute on compelling investment opportunities. For further information, please contact:
Dream Unlimited Corp.
Pauline Alimchandani | Kim Lefever |
EVP & Chief Financial Officer | Director, Investor Relations |
(416) 365-5992 | (416) 365-6339 |
palimchandani@dream.ca | klefever@dream.ca |
Non-IFRS Measures
Dream’s consolidated financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”). In this press release, as a complement to results provided in accordance with IFRS, Dream discloses and discusses certain non-IFRS financial measures, including: Dream standalone, net margin %, assets under management, fee-earning assets under management, net operating income and debt to total assets ratio, as well as other measures discussed elsewhere in this release. These non-IFRS measures are not defined by IFRS, do not have a standardized meaning and may not be comparable with similar measures presented by other issuers. Dream has presented such non-IFRS measures as Management believes they are relevant measures of our underlying operating performance and debt management. Non-IFRS measures should not be considered as alternatives to comparable metrics determined in accordance with IFRS as indicators of Dream’s performance, liquidity, cash flow and profitability. For a full description of these measures and, where applicable, a reconciliation to the most directly comparable measure calculated in accordance with IFRS, please refer to the “Non-IFRS Measures” section in Dream’s MD&A for the three months ended March 31, 2019.
Forward-Looking Information
This press release may contain forward-looking information within the meaning of applicable securities legislation, including, but not limited to, statements regarding our objectives and strategies to achieve those objectives; our beliefs, plans, estimates, projections and intentions, and similar statements concerning anticipated future events, future growth, results of operations, performance, business prospects and opportunities, acquisitions or divestitures, tenant base, future maintenance and development plans and costs, capital investments, financing, the availability of financing sources, income taxes, vacancy and leasing assumptions, litigation and the real estate industry in general; as well as specific statements in respect of our development plans and proposals for future retail and condominium and mixed-use projects and future stages of current retail and condominium and mixed-use projects, including projected sizes, density, uses and tenants; development timelines and anticipated returns or yields on current and future retail and condominium and mixed-use projects, including timing of construction, marketing, leasing, completion, occupancies and closings; anticipated current and future unit sales and occupancies of our condominium and mixed-use projects; our pipeline of retail, commercial, condominium and mixed-use developments projects; development plans and timelines of current and future land and housing projects, including projected sizes, density and uses; anticipated current and future lot and acre sales and housing unit occupancies in our land and housing divisions and the timing of margin contributions from such sales; projected population and density in our housing developments; our ability to increase development on our owned lands and the anticipated returns therefrom; our anticipated ownership levels of proposed investments, including investments in units of Dream Office REIT and Dream Alternatives and other Dream Publicly Listed Funds; the development plans and proposals for Dream Alternatives’ current and future projects, including projected sizes, timelines, density, uses and tenants; anticipated levels of development, asset management and other management fees in future periods; and our overall financial performance, profitability and liquidity for future periods and years. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond Dream’s control, which could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These assumptions include, but are not limited to: the nature of development lands held and the development potential of such lands, our ability to bring new developments to market, anticipated positive general economic and business conditions, including low unemployment and interest rates, positive net migration, oil and gas commodity prices, our business strategy, including geographic focus, anticipated sales volumes, performance of our underlying business segments and conditions in the Western Canada land and housing markets. Risks and uncertainties include, but are not limited to, general and local economic and business conditions, employment levels, regulatory risks, mortgage rates and regulations, environmental risks, consumer confidence, seasonality, adverse weather conditions, reliance on key clients and personnel and competition. All forward-looking information in this press release speaks as of May 14, 2019. Dream does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise, except as required by law. Additional information about these assumptions and risks and uncertainties is disclosed in filings with securities regulators filed on SEDAR (www.sedar.com).