Genesis records earnings of $6.76 million in 2009

TSX Stock Symbol: GDC

CALGARY, March 31 /CNW/ - Genesis Land Development Corp. ("Genesis" or the "Company") is pleased to report financial results for the fiscal year ended December 31, 2009. Total revenues for the year were $86,561,817 (2008 - $83,830,638) with net earnings of $6,755,931 (2008 - $9,284,181) or $0.15 per share (2008 - $0.20 per share). Residential home sales accounted for $62,712,690 (72%) of total fiscal 2009 revenues, while residential lot sales were $23,138,346 (27%) and interest and other income was $710,781 (1%). In 2008, 61% of Company revenues were from home sales ($50,759,835) with 38% of revenues generated from land and lot sales ($31,797,919) while interest income accounted for 1% of revenues ($1,272,884).

Consolidated operating margins decreased in 2009 to 29% from 2008 margins of 48%. The decline in operating margins was primarily due to reductions in sales prices of single and multi-family homes sold during the year. As a result of weakening market conditions, Genesis aggressively reduced housing prices in order to move lot and housing inventory. General and administrative expenses, net of non-controlling interest allocations, were $10,235,000 in 2009 compared to $9,193,000 in 2008, an increase of $1,042,000 (11%), which is primarily due to higher fees for professional services incurred during the year.

Genesis added to its raw and developed land base in 2009. Land held for future development and under development increased from $253,150,746 at December 31, 2008 to $300,147,850 at December 31, 2009, an increase of $46,997,104 or 19% before write-downs. The Corporation recognized write-downs of real estate in the amount of $7,642,349 and $6,961,905 during the years ended December 31, 2009 and 2008, respectively. The increase of $680,000 of 10% in the write-downs compared to prior year is primarily driven by continuing declines in valuation of certain real estate properties despite a general economic recovery of Alberta's real estate market during the second half of 2009. During the year ended December 31, 2009, the Corporation closed the $30,258,000 purchase of 1,476 acres of residential land at Delacour in the Municipal District of Rocky View, northeast of Calgary as well as the $20,733,000 limited partnership purchase of 319 acres of residential land at Airdrie.

The Corporation improved its balance sheet during 2009 as financings decreased to $117,639,385 from the December 31, 2008 balance of $132,704,174. The debt to equity ratio (excluding non-controlling interests) was 1.13 as at December 31, 2009 versus 1.38 at December 31, 2008. It is the intention of management to eliminate all debt on raw land held for future development ($21,420,000 at December 31, 2009, 2008 - $28,830,000) by year end 2010.

    
    Land Development:
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During 2009, Genesis recognized revenue on 124 external lot sales. The average price per lot sold for 2009 was $187,000, an increase of $3,000 (2%) from the average price per lot of $184,000 for 2008. In 2009, despite a softening market which led to an adjustment in lot prices to remain competitive in the market place, the Company experienced a favorable sales mix driven by an increased sale of amenity lots.

For 2010, Genesis is planning to complete servicing for the initial phases of the fully approved quarter section of Saddlestone in NE Calgary, 200 lots in NW Calgary at Sage Meadows and 150 lots at the next phase of Bayside in Airdrie. During 2009, Genesis was also successful in obtaining conceptual scheme approval for 307 acres of land at Delacour in the County of Rocky View that is located 6 miles east of the City of Calgary's eastern limits. The approved parcel of land is expected to yield a total of approximately 850 residential lots to Genesis and is part of the Company's 70% owned base of 2,093 acres of contiguous land in the Delacour area. In addition, Genesis secured water rights to support development of its initial phases at Delacour.

In February 2010, Genesis entered into an agreement to cancel the sale transaction of 107 fully serviced lots previously contractually sold to a variable interest entity while retaining the sale contract of a 207 unit multi-family site to this same entity for $6,650,000. In March 2010, Genesis used these 107 lots as security for a $10,000,000 financing which was partially used to pay out the remaining $4,000,000 loan that was obtained by the VIE , and secured by the 107 lots, to finance the initial deposit of the original sales contract. These lots are presently being marketed to external builders which will include participation from the Company's internal single-family builder.

    
    Single-Family Home Building
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Genesis Builder's Group ("GBG") recorded a total of 118 home sales for 2009 compared to 113 for 2008. Of the 2009 sales, 63, 8 and 7 were sold in the Calgary communities of Taralake, Kincora and Sherwood, respectively, and 27 and 13 were sold in the Airdrie communities of Canals and Bayside, respectively. For the year ended December 31, 2009, the average selling price per single-family home was $382,000 compared to an average selling price of $403,000 for the same period in 2008. The decrease in average selling price is a reflection of price adjustments to help sell housing in a softer real estate market.

    
    Multi-Family Home Building
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Generations Group of Companies, the multi-family home building division, closed 72 home sales in 2009 at an average selling price of $241,000 per home. All sales occurred at The Breeze, a 125 unit condominium project in Airdrie. There were no multi-family sales in the prior year. Subsequent to December 31, 2009, the Company has achieved an additional 22 unit sales for the project. Five multi-family projects have undergone planning and work towards approvals but had not commenced construction in 2009 due to oversupply in the multi-family market. The Company is presently considering construction of two of these projects located in Taralake in NE Calgary and Kincora in NW Calgary as the multi-family market has shown some signs of a recovery and supply of multi-family product has declined.

    
    Commercial
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Genesis Commercial division did not record any revenues in 2009, but subsequent to year-end two commercial parcels held in limited partnerships were sold under unconditional sales agreements. These transactions totaled $6,958,250. The Company has continued interest in its other commercial sites including the Sage Hill Crossing regional shopping center site in NW Calgary.

    
    Net Asset Value
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As announced on March 4, 2010 the Company engaged the independent real estate services firm Cushman Wakefield Ltd. to appraise its entire land development portfolio. This process is nearing completion and Genesis expects to publicly release the results in early April. At that time, the Company will announce a scheduled date and time for a conference call to discuss year end results, the net asset value calculation and 2010 operations.

    
                          AUDITED FINANCIAL SUMMARY
             Year Ended 31st of December, 2009 and 2008 (in $CAN)

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                                                       2009          2008
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    Assets                                         344,770,390   365,454,449
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    Liabilities                                    211,497,786   238,870,651
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    Shareholders Equity                            133,272,604   126,583,798
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    Revenue                                         86,561,817    83,830,638
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    Expenses                                        80,956,565    76,177,634
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    Earnings before taxes and non-controlling
     interest                                        5,605,252     7,653,004
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    Net earnings                                     6,755,931     9,284,181
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    Earnings per share (basic & fully diluted)            0.15          0.20
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    Common Shares Outstanding                       44,111,757    44,416,519
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Genesis Land Development Corp. is a Calgary based land development company with an estimated inventory of more than 28,000 future residential building sites (single-family and multi-family) and over 1,000 acres of commercial/ industrial lands in Western Canada, of which more than an estimated 14,000 residential lots and over 530 acres of commercial/industrial lands are in the Calgary and Edmonton metropolitan areas.

Cautionary Statement Regarding Forward-Looking Information

This press release contains certain statements which constitute forward-looking statements or information ("forward-looking statements"), including the estimated completion dates of servicing of lots in Saddlestone, Sage Meadows and Bayside; the expected release date of the real estate appraisal; and the number of dwelling sites that Genesis will actually develop and sell. Although Genesis believes that the expectations reflected in our forward-looking statements are reasonable, our forward-looking statements have been based on factors and assumptions concerning future events which may prove to be inaccurate. Those factors and assumptions are based upon currently available information available to Genesis. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward looking statements. As such, readers are cautioned not to place undue reliance on the forward looking statements, as no assurance can be provided as to future results, levels of activity or achievements. The risks, uncertainties, material assumptions and other factors that could affect actual results are discussed in our Annual Information Form and other documents available at www.sedar.com. Furthermore, the forward-looking statements contained in this document are made as of the date of this document and, except as required by applicable law, Genesis does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward looking statements contained in this document are expressly qualified by this cautionary statement."

For further information: Gobi Singh, C.E.O., Genesis Land Development Corp., Toll Free: [phone], 1-800-341-7211, Fax: [phone], E-Mail: [email protected], Internet: www.genesisland.com