Dundee Corporation (TSX:DC.A)(TSX:DC.PR.A)(TSX:DC.PR.B) (the
"Corporation") is today reporting its financial results as at and
for the three months ended March 31, 2012. The Corporation's
unaudited condensed interim consolidated financial statements,
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 under the Corporation's
profile at www.sedar.com or the Corporation's website at
www.dundeecorp.com.
FINANCIAL HIGHLIGHTS
-- Net Earnings from continuing operations attributable to owners of the
Corporation during the first quarter of 2012 were $32.5 million or $0.53
per share on a fully diluted basis. This compares with net earnings from
continuing operations attributable to owners of the Corporation of $14.2
million during the same period of the prior year, or $0.17 per share on
a fully diluted basis. Net earnings in the first quarter of the prior
year also included $861.2 million from discontinued operations,
including a gain of $870.8 million, from the Corporation's divestment of
its interest in DundeeWealth Inc.
-- Market Value of Investments - The market value of the Corporation's
portfolio of investments, excluding equity accounted investments, was
$1.6 billion at March 31, 2012, and includes $1.1 billion in shares of
The Bank of Nova Scotia received by the Corporation on its divestment of
DundeeWealth Inc.
-- Equity Accounted Investments - Earnings from equity accounted
investments were $10.6 million during the first quarter of 2012 compared
with $15.3 million earned during the same period of the prior year.
Earnings from equity accounted investments in the first quarter of the
prior year included $8.0 million in respect of the Corporation's
investment in Breakwater Resources Limited ("Breakwater"), which was
subsequently sold in the third quarter of 2011. At March 31, 2012, the
market value of equity accounted investments was $654.3 million.
-- Fee Earning Assets under Management and Administration increased to
$13.7 billion at March 31, 2012, compared with $11.5 billion at March
31, 2011 and $12.3 billion at December 31, 2011.
-- Corporate Debt at March 31, 2012 was $532.8 million and included $273.0
million borrowed in our real estate and resource based subsidiaries.
DEVELOPMENTS IN THE FIRST QUARTER OF 2012
Growth in Assets under Management and Administration
The Corporation continues to grow its asset management base,
with assets under management and administration increasing to $13.7
billion at March 31, 2012, an increase of 11% over $12.3 billion of
assets under management and administration at December 31, 2011. A
significant part of this growth occurred in the real estate
segment, including growth of approximately $1.6 billion from new
acquisitions.
Expansion in the Agriculture Sector
Late in 2011, the Corporation created Dundee Agricultural
Corporation, a wholly owned subsidiary, to focus on sustainable
agricultural investment opportunities across Canada and globally.
In December 2011, Dundee Agricultural made its first anchor
investment in the sector by acquiring a majority interest in Blue
Goose Capital Corporation, a private company whose principal asset
is The Blue Goose Cattle Company, a leading operator in the organic
and natural beef production market. Under its stewardship, Blue
Goose has over 700,000 acres of deeded, leased and licensed grazing
land, as well as one of the largest organic cattle herds in North
America.
In March 2012, the Corporation expanded its portfolio in the
agriculture sector through the acquisition of a 14% interest in
Agrimarine Holdings Inc. ("Agrimarine"), a Canadian publicly traded
company operating in the fisheries sector. Agrimarine has developed
a new farm management system, with the intent of providing
solutions to issues facing the fish farming industry. Agrimarine is
currently assessing the economics of its technology in fresh water
at its fish rearing facility in China.
Privatization of Dundee Capital Markets Inc. ("Dundee Capital
Markets")
During the first quarter of 2012, the Corporation completed the
acquisition of all of Dundee Capital Markets' outstanding common
shares not already held by the Corporation at a price of $1.125 per
share by way of a court approved plan of arrangement under the
Business Corporations Act (Ontario), essentially privatizing its
investment in Dundee Capital Markets. The Corporation paid $88.0
million in respect of the transaction.
FIRST QUARTER 2012 SEGMENTED RESULTS OF OPERATIONS
(in thousands of dollars)
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For the three months ended March 31, 2012 2011
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Net earnings (loss) before income taxes from:
Real estate segment $ 12,885 $ 11,723
Resource segment 781 7,258
Agriculture segment (716) -
Asset management segment 33,735 (1,523)
Capital markets segment 3,765 5,253
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50,450 22,711
Income taxes (14,911) (5,022)
Discontinued operations:
Loss, net of taxes - (20,000)
Gain on sale of discontinued operations, net of
taxes - 870,828
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Net earnings for the period $ 35,539 $ 868,517
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Net earnings attributable to:
Owners of the parent
Continuing operations $ 32,461 $ 14,164
Discontinued operations - 861,158
Non-controlling interest 3,078 (6,805)
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$ 35,539 $ 868,517
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The Corporation's real estate segment generated net earnings
before income taxes of $12.9 million during the first quarter of
2012 compared with $11.7 million earned in the same period of the
prior year. Increased equity earnings from the Corporation's
investment in real estate ventures were partially offset by lower
margins incurred on land transactions, reflecting reduced
transaction volumes. During the first quarter of 2012, the
Corporation earned $7.5 million from equity accounted real estate
investments compared with $4.2 million earned in the first quarter
of the prior year. Equity earnings from real estate investments
include the Corporation's share of changes in fair values of
investment properties. Changes in fair values of investment
properties may cause significant variations in period-over-period
earnings.
During the first quarter of 2012, the resource segment generated
net earnings of $0.8 million compared with net earnings of $7.3
million in the same period of the prior year. The decrease in
earnings related primarily to a decrease in equity earnings in this
segment, which were $3.2 million in the first quarter of 2012
compared with $11.1 million earned in the same period of the prior
year. As previously indicated, equity earnings from resource
investments in the first quarter of the prior year included $8.0
million from the Corporation's investment in Breakwater.
At March 31, 2012, fee earning assets under management and
administration had increased to $13.7 billion, representing an 18%
increase over $11.5 billion in fee earning assets under management
and administration at March 31, 2011, and an 11% increase over fee
earning assets under management and administration at December 31,
2011. Correspondingly, management fee revenue in the asset
management segment increased to $16.3 million in the first quarter
of 2012 compared with $8.1 million in the first quarter of the
prior year.
The Corporation's asset management segment includes the
Corporation's direct investment holdings and related profitability.
During the three months ended March 31, 2012, the Corporation
realized $21.6 million in earnings from these direct investments,
compared with $2.3 million earned in the first quarter of the prior
year.
Dundee Capital Markets generated earnings before taxes of $3.8
million in the first quarter of 2012, compared with earnings of
$5.3 million in the same quarter of the prior year. Despite
improved economic conditions generally, investor confidence remains
fragile amidst concern over sovereign debt issues and the downside
risk of possible austerity measures globally. Capital markets
activities in the resource industry in particular, a core focus for
the capital markets segment, decreased significantly in the first
quarter of 2012 compared with the same period of the prior
year.
ABOUT THE CORPORATION
Dundee Corporation is an independent publicly traded Canadian
asset management company. The Corporation's asset management
activities are focused in the areas of the Corporation's core
competencies and include real estate and infrastructure as well as
energy, resources and agriculture. Asset management activities are
carried out by Ned Goodman Investment Counsel Limited, a registered
portfolio manager and exempt market dealer across Canada and an
investment fund manager in the province of Ontario, and by DREAM,
the asset management division of Dundee Realty Corporation, a 70%
owned subsidiary of the Corporation. Asset management activities
are supported by the Corporation's ownership interest in Dundee
Capital Markets Inc. Dundee Capital Markets is also the asset
manager of the Corporation's flow-through limited partnership
business carried out through the "CMP", "CDR" and "Canada Dominion
Resources" brands. Dundee Corporation also owns and manages direct
investments in these core focus areas, through ownership of both
publicly listed and private companies. Real estate operations are
carried out through the Corporation's investment in Dundee Realty
Corporation, an owner, developer and manager of residential and
recreational properties in North America. Energy and resource
operations include the Corporation's ownership in Dundee Energy
Limited (formerly Eurogas Corporation), an oil and natural gas
company with a mandate to create long-term value through the
development of high impact energy projects. The Corporation also
holds several other equity accounted investments in the resource
sector. Agricultural activities are carried out through a newly
formed entity, Dundee Agricultural Corporation. Dundee Agricultural
Corporation acquired a 79% interest in Blue Goose Capital
Corporation, a privately-owned Canadian company with a leading
position in the organic and natural beef production markets with
operations in both British Columbia and Ontario.
Contacts: Dundee Corporation Ned Goodman President and Chief
Executive Officer (416) 365-5665 Dundee Corporation Lucie Presot
Vice President and Chief Financial Officer (416) 365-5157
www.dundeecorp.com
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