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Dundee Corporation Reports Fourth Quarter and Year End 2017 Financial Results

TORONTO, March 28, 2018 (GLOBE NEWSWIRE) -- Dundee Corporation (TSX:DC.A) (the “Corporation” or “Dundee”) is reporting its financial results for the three months and the year ended December 31, 2017.

During 2017, the Corporation incurred a net loss attributable to owners of Dundee Corporation of $52.5 million, or a loss of $1.01 per share, compared to the prior year’s net loss attributable to owners of Dundee Corporation of $147.0 million or $2.62 per share.

The net loss attributable to owners of Dundee Corporation during the fourth quarter of 2017 was $69.6 million, or a loss of $1.20 per share, compared with a net loss of $106.4 million or $1.84 per share incurred during the same period of the prior year. Losses incurred during the fourth quarter of 2017 included net losses of $22.8 million related to discontinued operations attributable to owners of Dundee Corporation, compared with losses from discontinued operations of $2.1 million attributable to owners of Dundee Corporation incurred in the fourth quarter of the prior year.

“As planned, we made progress towards key longer-term objectives, which included lowering our expense profile, reducing our interest expense payments and continuing to rationalize holdings in our portfolio,” said Jonathan Goodman, Executive Chairman of the Corporation. “Our business continues through a period of transition, but we are optimistic results will improve as we recalibrate our strategic focus.”

“We are encouraged by the performance of our investment portfolio, which includes investments in a number of companies in the resources sector. As we pivot our business to focus more on this segment of the market we feel we are well positioned,” added Mr. Goodman.

STRATEGIC UPDATE
As part of its ongoing focus on maximizing shareholder value, the Corporation will undertake a process to review and evaluate its entire portfolio of public and private investment holdings. This portfolio includes companies in a cross section of industries including mining, energy, real estate, financial services, agriculture, pharmaceuticals and industrials.

In addition, the Corporation also announced today that it is relaunching a resource-focused capital markets platform. Dundee has a long legacy of successfully investing in the mining industry and is recognized as an international leader in natural resources investing. To support its re-entry into capital markets, Dundee has hired a team of professionals in Vancouver who will be actively involved in financing and strategic advisory services in the mining sector. Effective April 2, 2018, Messrs. Rick Cohen, Rob Klassen, Olav Langelaar and associate, Andrew Nelson, will join the Corporation.

FINANCIAL RESULTS

  • During 2017, market appreciation from investments was $63.4 million, compared with market appreciation of $8.6 million in the prior year. Market appreciation was $15.3 million in the fourth quarter, compared with market depreciation of $102.7 million in the fourth quarter of 2016.
  • Consolidated revenues were $183.3 million in 2017, compared with revenues of $232.9 million in the prior year.
  • During 2017, the Corporation recognized a loss from its equity accounted investments of $53.1 million, compared with a loss of $10.2 million in the prior year.
  • At the head office level, the Corporation held cash of $40.5 million and a portfolio of publicly traded securities with a total value of $220.5 million at the end of 2017. There were no amounts owing pursuant to the Corporation’s bank debt arrangements at December 31, 2017.

OPERATIONAL REVIEW

  • Parq Vancouver, a Vancouver-based casino and leisure resort development project, opened its doors for business on September 29, 2017. Since opening, all gaming activities, eight restaurants and lounges, both the Douglas and JW Marriott hotels, and meeting and convention facilities are fully operational and are in ramp-up mode since late in the fourth quarter of 2017. During 2017, the Corporation incurred losses from its indirect investment in Parq Vancouver of $4.9 million, reflecting costs associated with the commencement of operations.
  • In 2017, the Corporation recognized losses of $44.6 million relating to its investment in Union Group International Holdings Limited (“Union Group”). In order to determine the effects of a restructuring undertaken by Union Group to remediate liquidity concerns, the Corporation requested an audit of the net assets of Union Group, which Union Group was not able to provide in a timely manner. Until such time as Union Group is able to provide audit evidence of the existence and value of its underlying portfolio of investments, the Corporation has determined that it is appropriate to carry the value of its investment at the discounted fair value of Union Group’s investment in ICC Labs Inc. The Corporation’s attributed value to its investment in Union Group may vary significantly in future periods, as Union Group provides evidence of the value of its other assets.
  • On December 6, 2017, a catastrophic fire at the facilities of Blue Goose Pure Foods Ltd. (“BGPF”) rendered the facilities inoperative, following which, on December 7, 2017, the lender to BGPF made demand on BGPF for the payment of all amounts borrowed. The lender did not have recourse to any of the other businesses of Blue Goose Capital Corp. (“Blue Goose”), nor did it have recourse to Dundee Corporation and accordingly, on December 14, 2017, the lender appointed an interim receiver with broad powers over the assets of BGPF. Full receivership was established by the lender on December 21, 2017. Blue Goose has determined that following the appointment of an interim receiver, it effectively lost control of the operations of BGPF and, as a result, the operating results and cash flow of BGPF have been classified as discontinued operations in the Corporation’s consolidated financial statements.

SHAREHOLDERS’ EQUITY ON A PER SHARE BASIS

Carrying Value
as at
31-Dec-17
Operating subsidiaries $ 275,137
Equity accounted investments 104,761
Investments carried at fair value through profit or loss 385,193
Other net corporate account balances (28,531)
Total shareholders' equity 736,560
Less: Shareholders' equity attributable to holders of:
Preference Shares, series 2 (84,053)
Preference Shares, series 3 (43,015)
Shareholders' equity attributable to holders of Class A
Subordinate Voting Shares and Class B Shares of the Corporation $ 609,492
Number of Class A Subordinate Voting Shares and Class B Shares
of the Corporation issued and outstanding
Class A Subordinate Voting Shares 55,701,603
Class B Shares 3,114,804
58,816,407
Shareholders' Equity on a Per Share Basis $ 10.36

FOURTH QUARTER AND YEAR END 2017 CONFERENCE CALL AND WEBCAST DETAILS
The Corporation’s audited consolidated financial statements as at and for the year ended December 31, 2017, along with the accompanying management’s discussion and analysis, and the Corporation’s 2017 Annual Information Form 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.dundeecorp.com.

The Corporation will host a conference call and webcast to discuss its fourth quarter and year end 2017 financial results. The details for the event are as follows:

Date:
Time:
Webcast:
Live Call:
Thursday, March 29, 2018
10 a.m. EDT
www.dundeecorp.com
1.888.231.8191 or 1.647.427.7450

The conference call will be archived for replay until Thursday, April 5, 2018 at midnight. To access the archived conference call, please dial 1.855.859.2056 or 1.416.849.0833 and enter the encore code 3679797. An archive of the audio webcast will also be posted to Dundee Corporation’s website.

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 engaged in diverse business activities in the areas of investment advisory, corporate finance, energy, resources, agriculture, real estate and infrastructure. Dundee Corporation also holds, directly and indirectly, a portfolio of investments mostly in these key areas, as well as other select investments in both publicly listed and private enterprises.

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 2017 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:

John Vincic
Investor and Media Relations
Dundee Corporation
(647) 402-6375

or

Lucie Presot
Executive Vice President and
Chief Financial Officer
Dundee Corporation
(416) 365-5157

Source:Dundee Corporation