Terra Firma Capital Corporation (TSX VENTURE:TII) ("Terra Firma" or the
"Company"), a real estate finance company, today announced that net income for
the three months ended June 30, 2012 more than doubled to $212,000, or $0.01 per
basic and diluted share, from $94,000, or $0.01 per basic and diluted share in
the comparative period in 2011. Interest income grew 498% to $1,058,000 in the
second quarter of 2012 from $177,000 in the second quarter of 2011. All amounts
are stated in Canadian dollars.
Net income for the six months ended June 30, 2012 grew by 561% to $465,000, or
$0.02 per basic and diluted share, from $70,000, or $0.00 per basic and diluted
share in the comparative period in 2011. Interest income grew 470% to $2,024,000
in the first half of 2012 from $355,000 in the first half of 2011.
The substantial growth in Terra Firma's revenues and net income for the three
and six months ended June 30, 2012 as compared to the year earlier periods was
driven primarily by a substantial increase in mortgage and loan investments
originated and funded over the past twelve months. The Company's loan portfolio
increased to $28.8 million (with a weighted average effective interest rate of
19.3%) as at June 30, 2012 versus $16.7 million and $3.3 million as at December
31, 2011 and June 30, 2011, respectively.
Interest expense was higher for the three and six months ended June 30, 2012 as
compared to the year earlier period, as a result of the issuance of $10.1
million of 3-year, 7% convertible debentures and an increase in the syndicated
portion of the Company's loan portfolio to $12.7 million as at June 30, 2012
from $4.8 million and $0.85 million as at December 31 2011 and June 30, 2011,
respectively. These funding sources were used to leverage the Company's
shareholders' equity to fuel the growth of its loan portfolio and increase the
return on its net investment, while limiting its overall portfolio risk profile.
"We are very pleased with our 2012 second quarter and first half results,"
commented Mr. Y. Dov Meyer, Terra Firma's CEO and President. "We continue to
forge new and strengthen existing relationships with experienced real estate
owners and complementary co-lenders - the drivers of growth, sustainability and
quality of our loan portfolio."
"We are well positioned to continue the origination of quality real estate
lending transactions and to grow our revenue and earnings throughout the balance
of 2012 and beyond" concluded Mr. Meyer.
2012 Second Quarter Operational Highlights:
-- During the three months ended June 30, 2012 Terra Firma completed two
new loan investments totaling $3.4 million on projects in Toronto. These
investments were funded from the Company's syndication of a prior funded
loan, which realized cash proceeds of $3.8 million.
The Company's Management's Discussion & Analysis and Financial Statements as at
and for the three and six months ended June 30, 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. Terra Firma is managed by
Counsel Asset Management, L.P., a wholly owned subsidiary of Counsel Corporation
(TSX:CXS). Counsel Corporation owned approximately 20.2% of the outstanding
common shares of Terra Firma as at June 30, 2012. For further information please
visit Terra Firma's website at www.terrafirmacapital.ca.
About Counsel Corporation
Counsel Corporation (TSX:CXS) is a financial services company that operates
through its individually branded businesses in residential mortgage lending,
distressed and surplus capital asset transactions, real estate finance and
private equity investment. For further information, please visit Counsel's
website at www.counselcorp.com.
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 Corporation
Condensed Statements of Operations
For the three and six months ended June 30, 2012 and 2011
(Unaudited)
Three months ended Six months ended
June 30, June 30,
2012 2011 2012 2011
$ $ $ $
---------------------------------------------------
Revenue
Interest 1,058,182 176,915 2,024,470 355,116
Earnings from joint
ventures 19,482 22,174 38,933 180,664
---------------------------------------------------
1,077,664 199,089 2,063,403 535,780
---------------------------------------------------
Expense
General and
administrative expense 133,131 51,421 260,849 98,628
Stock based
compensation 129,311 - 159,668 252,390
Interest expense 490,527 42,855 973,622 83,903
---------------------------------------------------
752,969 94,276 1,394,139 434,921
---------------------------------------------------
Income before income
taxes 324,695 104,813 669,264 100,859
Income tax provision 112,462 10,586 203,814 30,000
---------------------------------------------------
Income from continuing
operations 212,233 94,227 465,450 70,859
Loss from discontinued
operations - (153) - (471)
---------------------------------------------------
Net income and
comprehensive income 212,233 94,074 465,450 70,388
---------------------------------------------------
Basic and diluted
earnings (loss) per
share
Continuing operations 0.01 0.01 0.02 0.00
Discontinued operations 0.00 (0.00) 0.00 (0.00)
---------------------------------------------------
0.01 0.01 0.02 0.00
---------------------------------------------------
Weighted average number
of common shares
outstanding -basic and
diluted 30,495,000 18,795,000 30,495,000 18,676,326
The notes contained in the Company's interim financial statements are an
integral part of these condensed statements.
Terra Firma Capital Corporation
Condensed Statements of Financial Position
As at June 30, 2012 and December 31, 2011
(Unaudited)
June 30, December 31,
2012 2011
$ $
------------------------------
Assets
Cash and cash equivalents 1,468,519 8,662,505
Interest and sundry receivables 1,466,051 752,402
Prepaid expenses and deposits 19,643 7,365
Loan and mortgage investments 28,787,195 16,724,774
Interests in joint ventures 3,807,173 1,073,319
Portfolio investment 950,000 -
------------------------------
36,498,581 27,220,365
------------------------------
Liabilities
Accounts payable and accrued liabilities 1,380,243 682,186
Provision for discontinued operations 191,411 251,864
Unearned revenue 81,755 52,624
Income taxes payable 201,221 82,169
Deferred income taxes 12,436 10,260
Loans and mortgages payable 12,682,046 4,832,267
Debentures payable 10,077,225 10,061,869
------------------------------
24,626,337 15,973,239
Shareholders' equity 11,872,244 11,247,126
------------------------------
36,498,581 27,220,365
------------------------------
The notes contained in the Company's interim financial statements are an
integral part of these condensed statements.
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