Gendis Inc. Announces First Quarter Earnings

/EINPresswire.com/ -- WINNIPEG, MB--(Marketwired - June 09, 2017) - Gendis Inc. (TSX: GDS) today announced its financial results for the 1^st quarter ended April 30, 2017.

Net earnings for the 1^st 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 1^st quarter. Revenue for the 1^st quarter was $1,695,000 compared to $1,227,000 for the prior year 1^st quarter. Revenue less expense for the 1^st quarter was $489,000 compared to $255,000 for the prior year 1^st 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

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

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Gendis Inc. Announces First Quarter Earnings

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