Dundee Corporation (TSX: DC.A) (the “Corporation”
or “Dundee”) today announced its financial results for the three
months and year ended December 31, 2021. All currency amounts in
this press release are in Canadian dollars except as otherwise
indicated.
FOURTH QUARTER 2021 RESULTS
- Demonstrated significant progress
in rationalizing non-core legacy portfolio by completing the sale
of the beef division of Blue Goose Capital Corp. (“Blue Goose”) for
total proceeds, net of adjustments, of $70.6 million, including
$8.1 million completed during the third quarter of 2021, and paid
down $32.2 million in consolidated debt. In addition, Blue Goose
incurred $5.2 million in transaction costs.
- Reduced total corporate G&A
costs by 33% compared to the fourth quarter of 2020 (37% excluding
stock-based compensation).
- Reported net income from its
portfolio investments of $12.1 million (2020 – $22.2 million).
- On a consolidated basis, the
Corporation reported cash of $93.9 million as at December 31, 2021
(September 30, 2021 – $84.1 million).
- Generated consolidated revenues of
$3.5 million (2020 – $5.9 million).
- Majority-owned United Hydrocarbon
International Corp. reduced the fair value estimate of its oil
royalty interest, associated contingent bonus payments, and escrow
receivable by $17.9 million, due to heightened geopolitical risk in
the Republic of Chad and uncertain future of the operator, Delonex
Energy Limited.
- Incurred a net loss attributable to
owners of the Corporation of $13.6 million (2020 – earnings of
$32.8 million), or a loss of $0.17 per share (2020 – earnings of
$0.31 per share, before the effect of any dilutive securities)
including non-cash items of $11.4 million.
FULL YEAR RESULTS
- Consolidated revenues of $18.4
million (2020 – $18.0 million).
- During the year 2021, the
Corporation generated net proceeds of $116.9 million (2020 – $220.9
million) from the sale of non-core legacy assets as well as various
mining investments.
- Reduced total corporate G&A
costs by 33% compared to 2020 (36% excluding stock-based
compensation).
- Net loss attributable to owners of
the Corporation of $93.0 million (2020 – $65.4 million), or a loss
of $1.09 (2020 – $0.69) per share, including non-cash items of
$92.8 million.
Jonathan Goodman, President and Chief Executive
Officer of Dundee Corporation, commented:
“Dundee made significant progress in 2021
against all three of our strategic pillars: doing more mining
deals, rationalizing our legacy portfolio of non-core assets, and
streamlining our cost structure.”
“I am pleased with the way our entire Dundee
investment team remained active in identifying, de-risking and
investing in mining companies with solid value propositions during
2021. Despite bouts of slower deal flow across the mining sector in
2021, the DGMP team were finders in a number of financings. During
the fourth quarter, we increased positions in high-quality,
well-run mining companies such as Reunion Gold, Magna Mining, 1911
Gold and Moneta Gold among others. With recent geopolitical events
and a global pandemic exposing the fragility of global supply
chains and financial systems, we are emboldened believers that the
need for high quality and sustainably sourced mining assets has
never been greater. We remain focused on investing in the long-term
and working with our investee companies as advisors and partners to
maximize asset value and realize their full potential.”
Mr. Goodman continued, “We were successful in
further rationalizing our legacy portfolio by completing the sale
of Blue Goose’s beef division, which closed in the fourth quarter.
Closing this deal represents a significant milestone as Blue Goose
was a major component of our legacy portfolio. The aggregate
proceeds of $70.6 million and subsequent repayment of debts
significantly deleverages our balance sheet, reduces quarterly
expenses, and frees up the time and resources of management and
staff to focus more closely on our core mining investment business.
We continue to look for ways to further rationalize our non-core
legacy portfolio and will continue to update the market on our
progress.”
“We continued to make progress in reducing our
Corporate G&A run rate in the fourth quarter of 2021. We see a
clear path to additional G&A improvements in leasehold costs,
IT costs, insurance costs and other items. We remain laser-focused
on reducing run-rate G&A as well as funding to
subsidiaries.”
Mr. Goodman concluded, “Dundee continues to
execute on all aspects of our transformation strategy. I am
encouraged by our ability to sustain and grow our momentum in 2021,
and I look forward to a stronger 2022. Our team remains committed
to growing the core business and setting Dundee up to deliver
long-term, sustainable value for our stakeholders, shareholders and
partners. I would like to thank the entire team for their efforts
in managing through a period of incredible change.”
FINANCIAL
RESULTS
Operating results during 2021 reflect a $41.6
million market depreciation (2020 – $81.4 million market
appreciation) in certain of the Corporation’s investments that are
carried in the consolidated financial statements at fair value
through profit or loss. Of this decline, $35.2 million was
attributed to the write down in our position in TauRx. In addition,
net income from investments during 2021 includes $3.2 million (2020
– $5.2 million) dividend and interest income distributed from its
portfolio investments. Additionally, during 2021, the Corporation
recognized earnings from its equity accounted investments,
excluding real estate joint ventures, of $3.0 million (2020 – $5.8
million loss).
OPERATING SUBSIDIARIES’
PERFORMANCE
Goodman & Company, Investment Counsel Inc.
(“GCIC”)
Goodman & Company, Investment Counsel Inc.
(“GCIC”) AUM decreased from $84.8 million at the end of December
2020 to $57.9 million at the end of December 2021. The decrease in
AUM is mainly due to $24.1 million in market depreciation. During
2021, GCIC raised capital of $21.1 million, primarily from
launching a tax-sheltered limited partnership, CMP 2021 Resource
Limited Partnership. Redemptions of AUM during 2021 were $23.8
million. During 2021, this segment incurred a pre-tax loss of $1.2
million (2020 – $1.8 million).
During 2021, GCIC recognized financial services
revenue of $2.5 million (2020 – $2.1 million) from the services
provided by Dundee Goodman Merchant Partners, a division of
GCIC.
Blue Goose
Blue Goose completed the sale of its shares in
Lambert Creek Organic Meats Ltd. (“Lambert Creek”), a regulated
abattoir in British Columbia, and certain assets of The Blue Goose
Cattle Company Ltd. (“BG Cattle”) in September 2021 for aggregate
proceeds of $8.1 million. In October 2021, Blue Goose closed the
sale of BG Cattle for aggregate proceeds of $62.5 million,
inclusive of $17.2 million required to repay BG Cattle’s debt, and
recognized a loss of approximately $0.8 million, net of $5.2
million of transaction costs. Accordingly, the results of the beef
division for the three months and year ended December 31, 2021 and
2020 are classified as discontinued operations.
During the third quarter of 2021, Blue Goose
reassessed the fair value of certain real properties and recognized
an impairment loss of $5.0 million, reducing their carrying value
to their estimated realizable amount.
Blue Goose generated a pre-tax operating loss of
$4.7 million in 2021 (2020 – $2.3 million), of which $3.0 million
(2020 – earnings of $1.6 million) was incurred by the discontinued
operations (beef division).
United Hydrocarbon International Corp.
(“UHIC”)
UHIC reported a pre-tax loss of $42.5 million
during 2021 (2020 – $130.5 million), as a result of the fair value
change to its royalty interest and associated contingent bonus
payments, owing to the increased uncertainty surrounding the
Delonex Energy Limited strategic alternatives process and
heightened geopolitical risks in the Republic of Chad.
Dundee Sustainable Technologies Inc. (“Dundee
Technologies”)
Dundee Technologies incurred a pre-tax loss of
$3.0 million (2020 – $3.3 million) during 2021. Dundee Technologies
continued to expand the provision of technical services in the
mining industry to evaluate processing alternatives using its
state-of-the-art metallurgy plant and skilled technical team.
Revenue in 2021 was $4.3 million (2020 – $3.1 million).
AgriMarine Holdings Inc. (“AgriMarine”)
AgriMarine continued to face challenging market
conditions in 2021 resulting from the COVID-19 pandemic. In
response, the company pivoted to making sales to alternative
markets at lower prices in an attempt to maintain sales
volumes.
During 2021, AgriMarine reported a pre-tax net
loss of $6.3 million (2020 – $2.3 million) with sales revenues of
$6.6 million (2020 – $7.2 million). The $6.3 million pre-tax loss
included a $0.3 million inventory loss due to mortality and an
impairment charge of $3.0 million against certain capital assets,
reducing their carrying value to the estimated fair value.
SHAREHOLDERS’ EQUITY ON A PER SHARE BASIS
|
|
Carrying Value as at December 31, |
|
|
|
2021 |
|
|
|
|
2020 |
|
|
Operating subsidiaries |
$ |
45,844 |
|
|
|
$ |
97,354 |
|
|
Equity accounted investments |
|
24,250 |
|
|
|
|
23,134 |
|
|
Investments carried at fair value through profit or loss |
|
185,297 |
|
|
|
|
222,380 |
|
|
Other net corporate account balances |
|
79,899 |
|
|
|
|
113,161 |
|
|
Total shareholders' equity |
|
335,290 |
|
|
|
|
456,029 |
|
|
|
|
|
|
|
|
Less: Shareholders' equity attributable to holders of: |
|
|
|
|
|
Preference Shares, series 2 |
|
(27,667 |
) |
|
|
|
(27,667 |
) |
|
Preference Shares, series 3 |
|
(50,423 |
) |
|
|
|
(50,423 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity attributable to holders of Class A |
|
|
|
|
|
Subordinate Voting Shares and Class B Shares of the
Corporation |
$ |
257,200 |
|
|
|
$ |
377,939 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Class A Subordinate Voting Shares and Class B Shares of
the Corporation issued and outstanding |
|
|
|
|
Class A Subordinate Voting Shares |
|
84,697,363 |
|
|
|
|
99,977,934 |
|
|
Class B Shares |
|
3,114,491 |
|
|
|
|
3,114,581 |
|
|
|
|
87,811,854 |
|
|
|
|
103,092,515 |
|
|
|
|
|
|
|
|
Shareholders' Equity on a Per Share Basis |
$ |
2.93 |
|
|
|
$ |
3.67 |
|
FOURTH QUARTER 2021 CONFERENCE CALL AND WEBCAST
DETAILS
Dundee’s management will be hosting a conference
call for interested investors on March 29, 2022 at 10:00 am ET.
Analysts and investors are invited to participate using the
following dial-in numbers or webcast link:
Participant Number (Local):
416-764-8659Participant number (Toll-free):
1-888-664-6392Conference ID:
06223587Audience URL:
https://produceredition.webcasts.com/starthere.jsp?ei=1535852&tp_key=ea8ef0244f
A replay of the conference call will be
available until 11:59 pm (ET) April 12, 2022, and can be accessed
using the following dial-in numbers:
Encore (Local):
416-764-8677Encore (Toll-free):
1-888-390-0541Encore ID: 223587#
The Corporation’s audited consolidated financial
statements as at and for the years ended December 31, 2021 and
2020, along with the accompanying management’s discussion and
analysis have been filed on the System for Electronic Document
Analysis and Retrieval (“SEDAR”) and may be viewed by interested
parties under the Corporation’s profile at www.sedar.com or the
Corporation’s website at www.dundeecorporation.com
ABOUT DUNDEE CORPORATION:
Dundee Corporation is a public Canadian
independent holding company, listed on the Toronto Stock Exchange
under the symbol “DC.A”. Through its operating subsidiaries, Dundee
Corporation is an active investor focused on delivering
long-term, sustainable value as a trusted partner in the mining
sector with more than 30 years of experience making accretive
mining investments.
FORWARD-LOOKING STATEMENTS:
This press release may contain forward-looking
information within the meaning of applicable securities
legislation, which reflects Dundee Corporation’s current
expectations regarding future events. 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 Dundee
Corporation’s control, which could cause actual results and events
to differ materially from those that are disclosed in or implied by
such forward-looking information. Such risks and uncertainties
include, but are not limited to, the factors discussed under “Risk
Factors” in the Annual Information Form of Dundee Corporation and
subsequent filings made with securities commissions in Canada.
Dundee Corporation does not undertake any obligation to update such
forward-looking information, whether as a result of new
information, future events or otherwise, except as expressly
required by applicable law.
FOR FURTHER INFORMATION PLEASE
CONTACT:
Investor and Media RelationsT: (416) 864-3584E:
ir@dundeecorporation.com
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