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Genesis Land Development Corp. — Management Reports 2025
May 7, 2025
44565_rns_2025-05-06_b9f002d6-0088-4f8e-9bf1-c3f19c35ad27.pdf
Management Reports
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GENESIS
GENESIS LAND DEVELOPMENT CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS
For the three months ended March 31, 2025
The Management's Discussion and Analysis ("MD&A") of the financial condition and results of operations of Genesis Land Development Corp. ("Genesis", "the Corporation", "we", "us", or "our") should be read in conjunction with the unaudited condensed consolidated interim financial statements and the notes thereto for the three months ended March 31, 2025 and 2024, prepared in accordance with International Financial Reporting Standards ("IFRS").
The unaudited condensed consolidated interim financial statements and comparative information have been reviewed by the Corporation's audit committee, consisting of three independent directors, and approved by the board of directors of the Corporation. Additional information, including the Corporation's Annual Information Form ("AIF") and the Corporation's MD&A for the year ended December 31, 2024, are available on SEDAR+ at www.sedarplus.ca.
All amounts are in thousands of Canadian dollars, except per share amounts or unless otherwise noted. This MD&A is dated as of May 6, 2025.
1
STRATEGY AND 2025 BUSINESS PLAN
Strategy
Genesis Land Development Corp. (“Genesis” or the “Corporation”) is an integrated land developer and residential home builder operating in the Calgary Metropolitan Area (“CMA”) with a strategy to grow its portfolio of well-located, entitled and unentitled primarily residential lands and serviced lots in the CMA.
As a land developer, Genesis acquires, plans, rezones, subdivides, services and sells residential lots and commercial and industrial lands to third party developers and builders, and sells lots and completed homes through a wholly-owned subsidiary, Genesis Builders Group Inc. (“GBG”), its home building division. The land portfolio is planned, developed, serviced and sold as single-family lots and townhouse, multi-family and commercial parcels at opportune times with the objective of maximizing returns.
Genesis acquires land strategically and opportunistically ensuring Genesis has a significant and balanced land supply in the CMA over the next ten to twenty years. Genesis may realize some of the value created through the land approval process by providing opportunities for industry partners to participate in the final development of communities on the land.
GBG designs, builds and sells homes on a significant portion of Genesis’ single-family lots and townhouse land parcels. GBG also acquires single-family lots from other land developers to build and sell single-family homes in other CMA communities.
Genesis manages its financial position by prudently and opportunistically allocating its cash resources among the following:
- maintaining a strong balance sheet;
- acquiring and developing land either directly or through land development entities;
- acquiring builder positions in third party communities; and
- returning cash to shareholders by paying dividends and/or buying back its common shares.
Market Overview
According to ATB Financial, Alberta’s 2025 GDP will continue to grow, though at a slower pace than in 2024, reflecting increased uncertainty from U.S. tariffs and slowing population gains. Despite these challenges, Alberta is projected to outperform the rest of Canada, supported by strong energy and tourism sectors. Continued gains from interprovincial migration will provide support for housing and encourage consumer spending.
According to the Calgary Real Estate Board (“CREB”), residential home sales in Calgary for the first three months of 2025 were 5,328, a year-over-year decrease of 17%. Ongoing economic uncertainty from potential U.S. tariffs weighed on consumer confidence which impacted homes sales in the first three months of 2025. The easing demand has helped the market shift back towards balanced conditions. Similar conditions exist in neighbouring Airdrie, where Genesis has two active projects.
Genesis is monitoring the potential effects of tariffs between Canada and the United States. While the company has minimal direct exposure, with no exports and only limited imports from the United States, there remains significant uncertainty regarding the broader economic impacts on the CMA, Alberta and Canada which could influence Genesis’s land development and housing businesses. Genesis will continue to monitor the situation and take steps to mitigate any potential impacts on its operations.
2025 Business Plan
Progress on 2025 Business Plan
Genesis continues to execute its growth business plan. Genesis achieved significant milestones in 2023 and 2024, receiving final development approvals and proceeding with the development of its Lewiston, Logan Landing and Huxley communities.
Growth also continues for GBG which is now building in fourteen communities in the CMA.
The following describes progress made on key elements of our growth plan.
1) Obtaining Additional Zoning and Servicing
Zoning and servicing entitlements are granted by the applicable municipal authorities. The timelines discussed below are management's best estimates at this time, given the uncertainties related to the regulatory approval process and market conditions.
In Q2 2024 Genesis closed the acquisition of 160 acres of development land in Calgary's southeast quadrant in the South Shepard Area Structure Plan ("ASP"). An ASP was approved to support a new residential community on these lands by Calgary City Council in 2013. An outline Plan was approved in 2025 and Land Use Application has been submitted to the City of Calgary with approval anticipated in 2025. Site servicing is anticipated to commence in 2026.
In Rocky View County (the "County"), Genesis has received an ASP approval for the OMNI project, a 185-acre commercial and retail project on a portion of the 610 acres of undeveloped land that Genesis controls in the County bordering the northeast quadrant of the City of Calgary. Approval of land use and a conceptual scheme for this project was received in 2025. Genesis and the County have successfully worked with Alberta Transportation to finalize plans and funding arrangements for an interchange at Stoney and Airport Trail with construction planned to start in 2025. Funding is in place and the design of the interchange is currently proceeding. Once completed, this interchange will provide primary transportation access to these lands.
2) Development and Sale of Land Parcels
Genesis continues to develop and implement plans for each of its core land holdings with the objective of maximizing returns by selling or developing the land at the most opportune time. Please see information provided under the heading "Real Estate Held for Development and Sale" in this MD&A.
Genesis periodically sells land parcels, generally for multi-family or commercial use, that have been developed within its communities.
3) Servicing Additional Phases
Servicing continues in four communities. Lot commitments from our third party home builder partners and financing are generally obtained prior to commencement of servicing for a phase.
- Lewiston: Servicing of the third phase in this north Calgary community will commence in Q2 2025. This phase is anticipated to be substantially serviced in Q1 2026 and will add 167 single-family lots. GBG and two third parties (each with a 20% ownership interest) will be the home builders in this phase;
- Logan Landing: Servicing of the second phase in this southeast Calgary community commenced in Q4 2024 and will add 172 single-family lots and is anticipated to be substantially serviced by Q3 2025. GBG and three third parties will be the home builders in this phase;
- Huxley: Servicing the first phase of this east Calgary community commenced in Q2 2024. This will add 259 single-family lots and is anticipated to be substantially serviced by Q3 2025. GBG and two third parties (each with a 20% ownership interest) will be the home builders in this phase; and
- Bayside: Servicing of Phase 15 commenced in Q4 2024 and will add 81 single-family lots. Phase 15 is expected to be substantially serviced by Q3 2025. GBG and one third party builder will be the home builders in this phase.
4) Investing in Additional Lands
Building and selling homes in communities developed by other parties is a key strategy adopted in 2020 to drive growth and profitability in Genesis' home building division. GBG is now active in fourteen communities, nine of which are third party communities.
As of March 31, 2025, GBG had outstanding contracts to purchase 572 lots and had 176 orders to build homes on lots purchased from third party developers.
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5) Establishing Land Development Partnerships
Genesis considers establishing land partnerships when a new community has received full municipal approvals. Partners are usually other home builders carefully selected to add value to the execution of the community's development program.
Lewiston Lands Limited Partnership ("LLLP") commenced with approximately 130 acres of residential development land, referred to as Lewiston, located in the Keystone ASP on the north side of the City of Calgary. In Q1 2023, Genesis closed a transaction to sell a 40% ownership stake in LLLP to two Calgary based third party home builders.
Huxley Lands Limited Partnership ("HLLP") commenced with approximately 161 acres of residential development land, referred to as Huxley, located in the Belvedere ASP on the east side of the City of Calgary. In Q4 2024, Genesis closed a transaction to sell a 40% ownership stake in HLLP to two Calgary based third party home builders.
In this MD&A, LLLP and HLLP are referred to collectively as the "Partnerships".
Development activities in Lewiston and Huxley are proceeding as described above.
6) Adding Select Third Party Builders in Genesis Communities
To diversify offerings and increase velocity of sales within its residential communities, Genesis holds regular discussions with reputable third party builders interested in acquiring lots in future phases in Genesis' communities. Genesis is currently working with seven third party builders.
7) Increasing the Velocity of Homes Sold by GBG
During Q1 2025, GBG entered into 75 new home sales contracts compared to 113 new home sales contracts in Q1 2024. As of March 31, 2025, Genesis had 269 outstanding new home orders compared to 275 as at March 31, 2024. To increase the velocity of homes sold, Genesis:
- acquires lots in communities from third party developers;
- adjusts pricing to meet market conditions;
- pursues construction cost efficiencies and actively manages supply chain challenges; and
- continues to monitor and control overhead costs.
8) Liquidity and Return of Capital
Liquidity: As of March 31, 2025, Genesis had $24,119 of cash and cash equivalents on hand (year-end ("YE") 2024 - $21,414), loan and credit facilities of $140,973 (YE 2024 - $133,494), real estate assets of $445,085 (YE 2024 - $440,792) and total assets of $585,013 (YE 2024 - $577,718). The ratio of loan and credit facilities to total assets was 24% as at March 31, 2025 compared to 23% as at December 31, 2024.
Return of Capital to Shareholders: On May 6, 2025, Genesis declared a dividend of $0.105 per share (for a total payment of $5,956, payable on May 27, 2025 to shareholders of record on May 16, 2025. Refer to heading "Subsequent Events" in this MD&A. Since 2014, when Genesis paid its first dividend, it will have returned an aggregate of $93,361 to shareholders by way of dividends and, through its Normal Course Issuers Bids ("NCIB"), bought back nearly 3.2 million common shares for an aggregate cost of $9,130.
Outlook
Genesis continues to execute on its growth strategy in both its land and housing divisions, sustained by a backlog of new home orders, higher volume of lot sales and the continued strength of the CMA market. However, new home orders in Q1 2025 were lower than Q1 2024, reflecting the current economic uncertainty. Genesis will continue to monitor the situation and take steps to mitigate any potential impacts on its operations.
Genesis is also working proactively with key contractor partners and home buyers to address concerns relating to cost increases and a lack of skilled labour and some products and materials in both our land development and home building divisions.
Genesis is closely monitoring the potential effects of tariffs between Canada and the United States. While the Corporation has minimal direct exposure, with no exports and only limited imports from the United States, there remains significant uncertainty regarding the broader economic impacts on the CMA, Alberta, and Canada which could influence Genesis' land development and housing businesses. Genesis will continue to monitor the situation and take steps to mitigate any potential impacts on its operations.
OPERATING HIGHLIGHTS
Key financial results and operating data for Genesis were as follows:
| ($000s, except for per share items or unless otherwise noted) | Three months ended March 31, (1) | |
|---|---|---|
| 2025 | 2024 | |
| Key Financial Data | ||
| Total revenues | 58,209 | 68,305 |
| Direct cost of sales | (40,255) | (49,864) |
| Gross margin | 17,954 | 18,441 |
| Gross margin (%) | 30.8% | 27.0% |
| Net earnings attributable to equity shareholders | 6,030 | 6,950 |
| Net earnings per share - basic and diluted | 0.11 | 0.12 |
| Key Operating Data | ||
| Land Development | ||
| Total residential lots sold (units) | 65 | 123 |
| Residential lot revenues | 12,480 | 16,625 |
| Gross margin on residential lots sold | 5,488 | 5,197 |
| Gross margin on residential lots sold (%) | 44.0% | 31.3% |
| Average revenue per lot sold (excluding non-core lots) | 192 | 150 |
| Home Building | ||
| Homes sold (units) | 71 | 85 |
| Revenues (2) | 49,829 | 56,200 |
| Gross margin on homes sold | 12,355 | 13,244 |
| Gross margin on homes sold (%) | 24.8% | 23.6% |
| Average revenue per home sold | 702 | 661 |
| New home orders (units) | 75 | 113 |
| Outstanding new home orders at period end (units) | 269 | 275 |
| Key Balance Sheet Data | As at Mar. 31, 2025 | As at Dec. 31, 2024 (3) |
| --- | --- | --- |
| Cash and cash equivalents | 24,119 | 21,414 |
| Total assets | 585,013 | 577,718 |
| Loan and credit facilities | 140,973 | 133,494 |
| Total liabilities | 292,280 | 290,520 |
| Shareholders' equity | 272,353 | 266,480 |
| Total equity | 292,733 | 287,198 |
| Loan and credit facilities to total assets | 24% | 23% |
(1) Three months ended March 31, 2025 and 2024 ("Q1 2025" and "Q1 2024", respectively).
(2) Includes other revenues and revenues of $4,100 for 25 lots in Q1 2025 purchased by the Home Building division from the Land Development division ($4,520 and 31 in Q1 2024) and sold with the home. These amounts are eliminated from residential lot revenues on consolidation.
(3) Year ended December 31, 2024 ("YE 2024").
Results from operations, including earnings and cash flows, vary considerably between periods for the reasons explained under the heading "Factors Affecting Results of Operations" in this MD&A.
Genesis sold 71 homes (70 single-family and 1 townhouse) in Q1 2025 compared to 85 single-family homes in Q1 2024. Genesis sold 40 residential lots to third parties in Q1 2025 compared to 92 residential lots sold to third parties in Q1 2024. These sales resulted in total revenues of $58,209 in Q1 2025 compared to $68,305 in Q1 2024.
New home orders for the three months ended March 31, 2025 were 75 units compared to 113 units for the same period in 2024. The Corporation ended the first quarter of 2025 with 269 outstanding new home orders, compared to 275 outstanding new home orders in the comparable period a year earlier. At December 31, 2024, Genesis had 265 outstanding new home orders.
Net income attributable to equity shareholders in Q1 2025 was $6,030 ($0.11 income per share - basic and diluted) compared to net income attributable to equity shareholders of $6,950 ($0.12 income per share - basic and diluted) in Q1 2024.
Factors Affecting Results of Operations
When reviewing the results, there are a number of factors that have historically affected Genesis' results of operations, including:
- the volatility of oil and gas prices and changes in the Canadian/US dollar exchange rate, both of which impact the Alberta energy industry, and have significant impact on the CMA real estate market and economy;
- changes to the regulatory environment, both direct and indirect, including for example, the land development approval process, mortgage lending rules, immigration policies, tariffs and economic restrictions imposed by regulatory authorities;
- changes in interest rates, including residential mortgage rates and the rates of interest charged to Genesis on its various credit facilities;
- costs incurred for the development and servicing of land and the sale of residential lots and other land parcels occur over a substantial period of time and results in cash flows that vary considerably between periods, creating significant volatility in the revenues, earnings and cash flows from operating activities;
- changes in home construction costs due to the availability and timing of trades, material and overall supply chain issues;
- land, lot and home prices and gross margins vary by community, by phase and by lot/home type, the nature of the development work required to be undertaken before the land and lots are ready for sale, and the original cost of the land and servicing; and
- seasonality which has historically resulted in higher revenues and higher cash outflows in the summer and fall months when home building sales and land servicing often peak.
5
Land Development
| Three months ended March 31, | |||
|---|---|---|---|
| 2025 | 2024 | % change | |
| Key Financial Data | |||
| Residential lot revenues (1) | 12,480 | 16,625 | (24.9%) |
| Direct cost of sales | (6,992) | (11,428) | 38.8% |
| Gross margin | 5,488 | 5,197 | 5.6% |
| Gross margin (%) | 44.0% | 31.3% | 40.6% |
| Gain in investments in land development entities | 530 | - | N/R (2) |
| Other expenses | (4,722) | (3,357) | (40.7%) |
| Earnings before income taxes | 1,296 | 1,840 | (29.6%) |
| Key Operating Data | |||
| Residential lots sold to third parties | 40 | 79 | (49.4%) |
| Residential lots sold through GBG | 25 | 31 | (19.4%) |
| Residential lots sold to third parties - non-core lots | - | 13 | N/R (2) |
| Total residential lots sold | 65 | 123 | (47.2%) |
| Average revenue per lot sold (excluding non-core lots) | 192 | 150 | 28.0% |
(1) Includes residential lot sales to third parties, residential lot sales to GBG and other revenues.
(2) Not relevant due to the size of the change.
Gross margin by source of revenue
| Three months ended March 31, | |||
|---|---|---|---|
| 2025 | 2024 | % change | |
| Residential lots | |||
| Residential lot revenues (1) | 12,480 | 16,625 | (24.9%) |
| Direct cost of sales | (6,992) | (11,428) | 38.8% |
| Gross margin | 5,488 | 5,197 | 5.6% |
| Gross margin | 44.0% | 31.3% | 40.6% |
(1) Includes residential lot sales to third parties, residential lot sales to GBG and other revenues.
Results from operations, including earnings and cash flows, vary considerably between periods for the reasons explained under the heading "Factors Affecting Results of Operations" in this MD&A.
Revenues and unit volumes
Residential lot sales to third party builders usually occur when newly developed phases first become available for sale creating fluctuations in lot revenues and associated earnings. Total residential lot sales revenues in Q1 2025 were $12,480 (65 lots) down from $16,625 (123 lots) in Q1 2024. In Q1 2025, 40 lots were sold to third party builders compared to 92 lots, including 13 non-core lots ($100), in Q1 2024. In Q1 2025, 25 lots were sold to GBG compared to 31 lots sold to GBG in Q1 2024.
There were no development land sales in Q1 2025 and Q1 2024. Development land sales occur periodically and comprise sales of commercial, multi-family and other lands that Genesis does not intend to build on through GBG.
Gross margin
Residential lots had a gross margin of 44% in Q1 2025 compared to 31% in Q1 2024. Residential lot and development land revenue and margins can vary significantly as described in the "Factors Affecting Results of Operations" in this MD&A.
Gain in investments in land development entities
The fair value of investments in land development entities is based on the market value approach method and used third party appraisals during the fourth quarter of 2024. This method used prices and other relevant information generated by market transactions involving identical or comparable assets. Where applicable, adjustments are also made during interim periods to reflect changes in fair value, incorporating management's estimates and assumptions. During the three months ended March 31, 2025, the Corporation recorded $530 as a gain in investment in fair value of investments held in the year (2024 - $Nil).
Other expenses
| Three months ended March 31, | |||
|---|---|---|---|
| 2025 | 2024 | % change | |
| Other expenses | |||
| General and administrative expense | (2,474) | (2,287) | (8.2%) |
| Selling and marketing expense | (389) | (327) | (19.0%) |
| Finance income | 102 | 459 | (77.8%) |
| Finance expense | (1,961) | (1,202) | (63.1%) |
| Total | (4,722) | (3,357) | (40.7%) |
The components of other expenses and the changes are shown in the table above.
In Q1 2025, other expenses totaled $4,722 or 41% higher than $3,357 incurred in Q1 2024. Other expenses were higher in Q1 2025 mainly due to higher general and administrative expense, selling and marketing expense, and net finance expense. Net finance expense was higher due to higher average loan balances and lower average cash balances in Q1 2025 as compared to Q1 2024.
Home Building
The home building business of Genesis is operated through its wholly-owned subsidiary, GBG.
| Three months ended March 31, | |||
|---|---|---|---|
| 2025 | 2024 | % change | |
| Key Financial Data | |||
| Revenues (1) | 49,829 | 56,200 | (11.3%) |
| Direct cost of sales | (37,474) | (42,956) | 12.8% |
| Gross margin | 12,355 | 13,244 | (6.7%) |
| Gross margin (%) | 24.8% | 23.6% | 5.1% |
| Other expenses | (6,131) | (6,071) | (1.0%) |
| Earnings before income taxes | 6,224 | 7,173 | (13.2%) |
| Key Operating Data | |||
| Homes sold in third party communities (units) | 33 | 54 | (38.9%) |
| Homes sold in Genesis communities (units) | 25 | 31 | (19.4%) |
| Homes sold in Partnerships communities (units) | 13 | - | N/R (2) |
| Total homes sold (units) | 71 | 85 | (16.5%) |
| Average revenue per home sold | 702 | 661 | 6.2% |
| New home orders (units) | 75 | 113 | (33.6%) |
| Outstanding new home orders at period end (units) | 269 | 275 | (2.2%) |
(1) Revenues include residential home sales and other revenue.
(2) Not relevant due to the size of the change.
Results from operations, including earnings and cash flows, vary considerably between periods for the reasons explained under the heading "Factors Affecting Results of Operations" in this MD&A.
Revenues and unit volumes
Revenues for single-family homes and townhouses were $49,829 (71 units) in Q1 2025, 11% lower than Q1 2024 revenues of $56,200 (85 units). In addition, 75 homes were contracted for sale in Q1 2025, a decrease of 34%, as compared to 113 in Q1 2024. This is due to significant economic uncertainty, including but not limited to the United States tariffs and the Canadian elections. The uncertainty may have broader economic impacts on the CMA, Alberta and Canada which could influence Genesis' land development and housing businesses. Genesis will continue to monitor the situation and take steps to mitigate any potential impacts on its operations. There were 269 outstanding new home orders at the end of Q1 2025 as compared to 275 outstanding new home orders at the end of Q1 2024.
Homes sold in Q1 2025 had an average price of $702 per home compared to $661 in Q1 2024. Fluctuations in the average revenue per home sold are due to differences in product mix, community, and market conditions. During Q1 2025 and Q1 2024, GBG's single-family homes product ranged in price from $451 to $1,233 depending on the location and the models being offered. In Q1 2025, 70 single-family homes and 1 townhouse were sold compared to 85 single-family homes in Q1 2024.
In Q1 2025, 38 of the 71 homes sold were built on residential lots supplied by Genesis and a land development Partnership (i.e. LLLP), while 31 of the 85 homes sold in Q1 2024 were built on residential lots supplied by Genesis.
As of March 31, 2025, GBG had outstanding contracts to purchase 572 lots and had 176 orders to build homes on lots purchased from third party developers.
GBG builds homes either after receiving a firm sale contract (a "pre-construction home") or on a quick possession ("spec") basis. The delivery time of a pre-construction home is approximately 10 to 12 months. Construction of spec homes commences before GBG receives a firm sale contract to ensure there is sufficient inventory for buyers seeking possession within a short period of time
(i.e., often 30-90 days). Townhouses are multi-unit complexes for which GBG commences construction prior to selling units in any individual building. This provides construction efficiencies and requires GBG to build some townhouses on a spec basis and to hold them in inventory until sold. The timing of the sale of spec homes is unpredictable, with spec home buyers usually being time sensitive, wanting to take possession in a short time frame. Genesis closely monitors its home building work-in-progress to anticipate and react to market conditions in a timely manner. As at the end of Q1 2025, GBG had $136,770 of work in progress, of which $13,087 related to spec homes in progress and $81,854 related to third party lots (YE 2024 - $133,797 of work in progress, of which $7,568 related to spec homes in progress and $88,556 related to third party lots).
The following table shows the split between quick possession sales and pre-construction homes.
| Three months ended March 31, | |||
|---|---|---|---|
| 2025 | 2024 | % change | |
| Quick possession sales (units) | 11 | 11 | - |
| Pre-construction home sales (units) | 60 | 74 | (18.9%) |
| Total home sales (units) | 71 | 85 | (16.5%) |
Gross margin
Genesis realized gross margin on home sales of 24.8% in Q1 2025 compared to 23.6% in Q1 2024. Fluctuations in gross margin are due to changes in market conditions and differences in product and community mix. In Q1 2025, 70 single-family homes and 1 townhouse were sold compared to 85 single-family homes in Q1 2024.
Other expenses
| Three months ended March 31, | |||
|---|---|---|---|
| 2025 | 2024 | % change | |
| Other expenses | |||
| General and administrative expense | (4,041) | (3,301) | (22.4%) |
| Selling and marketing expense | (2,028) | (2,591) | 21.7% |
| Finance income | 73 | 74 | (1.4%) |
| Finance expense | (135) | (253) | 46.6% |
| Total | (6,131) | (6,071) | (1.0%) |
The components of other expenses and the changes are shown in the table above.
In Q1 2025, other expenses totaled $6,131, compared to $6,071 in Q1 2024. Higher general and administrative expense was offset by lower selling and marketing expense (including sales commissions) and net finance expense. Higher general and administrative expenses in Q1 2025 included higher compensation expenses driven by increases in staffing. Decrease in selling and marketing expenses was primarily due to lower levels of homes sales activity. Lower net finance expense was mainly due to the lower interest rate in Q1 2025 compared to the same period in 2024.
Real Estate Held for Development and Sale
| March 31, | December 31, | ||
|---|---|---|---|
| 2025 | 2024 | % change | |
| Real estate held for development and sale | 445,085 | 440,792 | 1.0% |
Refer to note 3 in the condensed consolidated interim financial statements for the three months ended March 31, 2025 and 2024 which details the components of the changes in the net book value of real estate held for development and sale.
Real estate held for development and sale increases as a result of acquisitions and development activities and declines as a result of sales of residential lots, homes and development land parcels. Real estate held for development and sale increased by $4,293 as at Q1 2025 compared to YE 2024 mainly due to development and construction activities outpacing sales of residential lots and homes during the period.
The following table presents Genesis' real estate held for development and sale at net book value as at March 31, 2025:
| Net Book Value | |||
|---|---|---|---|
| Real Estate Held for Development and Sale | Lots, multi-family & commercial parcels | Land held for development (1) | Total |
| Communities Directly Controlled | |||
| Airdrie - Bayside, Bayview | 23,796 | 14,102 | 37,898 |
| Calgary SE - Logan Landing | 9,171 | 53,883 | 63,054 |
| Calgary SE - Hazel | - | 30,296 | 30,296 |
| Calgary SE Land Holdings | - | 68,911 | 68,911 |
| Rocky View County - North Conrich (425) | - | 6,997 | 6,997 |
| Rocky View County - OMNI | - | 6,139 | 6,139 |
| Other land (2) - non-core | - | 902 | 902 |
| Communities Controlled through Partnerships - 60% | |||
| Calgary N - Lewiston (owned by LLLP) | 345 | 35,983 | 36,328 |
| Calgary E - Huxley (owned by HLLP) | - | 57,790 | 57,790 |
| Total land development | 33,312 | 275,003 | 308,315 |
| Home building construction work-in-progress | 54,916 | ||
| Third party lots | 81,854 | ||
| Total home building | 136,770 | ||
| Total real estate held for development and sale | 445,085 |
(1) Land held for development comprises lands not yet subdivided into single-family lots or parcels.
(2) Other land is non-core and available for sale.
The following table presents the breakdown of Genesis' serviced single-family lots, multi-family and commercial parcels shown above, by community as at March 31, 2025:
| Serviced Lots, Multi-family and Commercial Parcels, by Community | Net Book Value | Single-family lots | Townhouse units | Townhouse/ multi-family parcels | Commercial parcels |
|---|---|---|---|---|---|
| Communities Directly Controlled | |||||
| Airdrie - Bayside, Bayview | 23,796 | 269 | - | 1 | - |
| Calgary SE - Logan Landing | 9,171 | 115 | - | - | - |
| Communities Controlled through Partnerships - 60% | |||||
| Calgary N - Lewiston (owned by LLLP) | 345 | 4 | - | - | - |
| Total | 33,312 | 388 | - | 1 | - |
The following table presents the estimated equivalent, by community of single-family lots and multi-family and commercial acres of Genesis' land held for development (shown previously) as at March 31, 2025, based on the Corporation's plans for the development of its lands. Refer to the section in this MD&A "Obtaining Additional Zoning and Servicing". The timelines discussed are management's best estimates at this time, given the uncertainties related to the regulatory approval process and market conditions.
| Estimated Equivalent if/when Developed | |||||
|---|---|---|---|---|---|
| Land Held for Development, by Community | Net Book Value | Land (1) (acres) | Single-family (lots) | Multi-family (acres) | Commercial (acres) |
| Communities Directly Controlled | |||||
| Airdrie - Bayside, Bayview | 14,102 | 66 | 274 | 2 | - |
| Calgary SE - Logan Landing | 53,883 | 327 | 1,340 | 7 | 3 |
| Calgary SE - Hazel | 30,296 | 160 | 1,184 | 3 | - |
| Calgary SE Land Holdings (2) | 68,911 | 1,194 | - | - | - |
| Rocky View County - North Conrich (425) (2) | 6,997 | 425 | - | - | - |
| Rocky View County - OMNI (2) | 6,139 | 185 | - | - | - |
| Other land - non-core | 902 | 156 | - | - | - |
| Communities Controlled through Partnerships - 60% | |||||
| Calgary N - Lewiston (owned by LLLP) | 35,983 | 96 | 635 | 3 | 4 |
| Calgary E - Huxley (owned by HLLP) | 57,790 | 161 | 1,378 | - | - |
| Total | 275,003 | 2,770 | 4,811 | 15 | 7 |
(1) Land not yet subdivided into single-family and other lots or parcels.
(2) Lands are in early stage and the estimated equivalents awaiting regulatory approval.
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Amounts Receivable
| March 31, 2025 | December 31, 2024 | % change | |
|---|---|---|---|
| Amounts receivable | 66,795 | 66,363 | 0.7% |
Genesis generally receives non-refundable deposits ranging from 5% to 20% at the time of entering into a sale agreement for residential lots with a third party builder. Amounts receivable are recognized on receipt of a minimum 15% non-refundable deposit and after agreed-to-services pertaining to the property have been substantially performed. Title to a lot or home that is contracted for sale is not transferred by Genesis to the builder or purchaser until full payment is received, thus mitigating credit risk. There are no amounts receivable past due and there have been no write-offs or allowance for doubtful accounts in 2025 or 2024.
As at Q1 2025, Genesis had $64,744 (401 lots) in amounts receivable related to third party builders compared to $64,384 (409 lots) in amounts receivable as at YE 2024 due on sold lots.
Individual balances due from third party builders at Q1 2025 that were 10% or more of total amounts receivable were $58,620 from four third party builders (YE 2024 - $57,956 from four third party builders).
Cash Flows (used in) from Operating Activities
Results from operations, including earnings and cash flows, vary considerably between periods for the reasons explained under the heading "Factors Affecting Results of Operations" in this MD&A.
| Three months ended March 31, | ||
|---|---|---|
| 2025 | 2024 | |
| Cash flows (used in) from operating activities | (3,740) | 9,642 |
| Cash flows (used in) from operating activities per share - basic and diluted | (0.07) | 0.17 |
The changes in cash flows (used in) from operating activities between Q1 2025 and Q1 2024 consist of the following:
| Operating Activities - Inflows (Outflows) | Three months ended March 31, | ||
|---|---|---|---|
| 2025 | 2024 | $ change | |
| Residential home sales | 50,120 | 56,182 | (6,062) |
| Residential lot sales | 13,338 | 9,056 | 4,282 |
| Development land sales | - | 4,064 | (4,064) |
| Residential home construction | (31,752) | (24,562) | (7,190) |
| Land development | (6,678) | (9,490) | 2,812 |
| Lots and land acquisitions | (6,569) | (15,967) | 9,398 |
| Suppliers and employees | (10,031) | (7,660) | (2,371) |
| Income tax | (12,437) | (2,586) | (9,851) |
| Other | 269 | 605 | (336) |
| Total | (3,740) | 9,642 | (13,382) |
The decreases in cash inflows from the sale of residential homes by GBG are primarily related to decreases in the volume of homes sold. Genesis sells residential lots to third party builders and typically receives deposits ranging from 5% to 20% of the purchase price from the builder. On receipt of a minimum 15% non-refundable deposit after agreed-to-services pertaining to the property have been substantially performed, Genesis recognizes all of the sales revenue. The balance of the purchase price is generally received in cash at the time of closing of the sale by the third party builder to a home buyer, which can be many months later, resulting in a timing difference between sales revenue recognition and the actual receipt of cash.
The year-over-year change in cash flows from operating activities is mainly due to higher income tax payments and higher cash outflows for residential home construction. Cash inflows from residential home and development land sales were also lower during Q1 2025. These were partially offset by higher cash inflows from residential lot sales and lower cash outflows for lots and land acquisitions.
13
LIABILITIES AND SHAREHOLDERS' EQUITY
The following table presents Genesis' liabilities and equity at Q1 2025 and YE 2024:
| March 31, | December 31, | |||
|---|---|---|---|---|
| 2025 | % of total | 2024 | % of total | |
| Loan and credit facilities | 140,973 | 24% | 133,494 | 23% |
| Provision for future development costs | 36,275 | 6% | 36,236 | 6% |
| Customer deposits | 25,247 | 4% | 19,577 | 3% |
| Accounts payable and accrued liabilities | 31,523 | 6% | 26,795 | 5% |
| Accounts payable related to residential lot purchases | 57,147 | 10% | 63,374 | 11% |
| Lease liabilities | 1,115 | 0% | 953 | 0% |
| Income tax payable | - | 0% | 10,091 | 2% |
| Total liabilities | 292,280 | 50% | 290,520 | 50% |
| Non-controlling interest | 20,380 | 3% | 20,718 | 4% |
| Shareholders' equity | 272,353 | 47% | 266,480 | 46% |
| Total liabilities and equity | 585,013 | 100% | 577,718 | 100% |
The ratio of total liabilities to equity is as follows:
| March 31, 2025 | December 31, 2024 | |
|---|---|---|
| Total liabilities | 292,280 | 290,520 |
| Total equity | 292,733 | 287,198 |
| Total liabilities to equity (1) | 100% | 101% |
(1) Calculated as total liabilities divided by total equity.
Loan and Credit Facilities
| Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | |
|---|---|---|---|---|---|
| Corporate revolving line of credit | 20,029 | 13,885 | 20,079 | 26,798 | 10,152 |
| Demand land project servicing loan | 1,132 | 3,813 | 3,808 | 8,329 | 11,682 |
| Demand land project servicing loans - LLLP | 4,157 | 4,318 | 3,006 | 328 | 15,927 |
| Demand land project servicing loan - HLLP | 14,077 | 12,317 | 5,648 | - | - |
| Demand operating line - LLLP | 23,711 | 23,256 | 22,998 | 22,439 | 21,500 |
| Demand operating line - HLLP | 16,411 | 16,191 | 15,941 | 15,665 | 15,377 |
| Demand operating line for single-family homes and lots | 8,753 | 8,167 | 3,100 | 11,210 | 8,805 |
| VTB mortgages payable - Calgary SE Land Holdings | 55,646 | 55,646 | 60,168 | 60,168 | 18,088 |
| VTB mortgage payable - Investment in Land Development Joint Venture | 5,780 | 5,780 | - | - | - |
| 149,696 | 143,373 | 134,748 | 144,937 | 101,531 | |
| Unamortized portions of the discount on the VTB mortgages payable | (7,981) | (9,020) | (9,456) | (10,457) | (2,707) |
| Unamortized deferred fees on loan and credit facilities | (742) | (859) | (969) | (875) | (932) |
| Balance, end of period | 140,973 | 133,494 | 124,323 | 133,605 | 97,892 |
The continuity of Genesis' loan and credit facilities, excluding deferred fees, is as follows:
| Three months ended March 31, 2025 | Year ended December 31, 2024 | |||
|---|---|---|---|---|
| VTB mortgages payable | Loan and credit facilities | Total | Total | |
| Balance, beginning of year | 52,406 | 81,947 | 134,353 | 104,324 |
| Advances | - | 18,221 | 18,221 | 110,273 |
| Repayments | - | (12,291) | (12,291) | (84,310) |
| Interest expense | 1,039 | 393 | 1,432 | 4,066 |
| Balance, end of period | 53,445 | 88,270 | 141,715 | 134,353 |
Loan and credit facilities are used primarily to finance the costs of developing land, building homes and for land purchases. Genesis accesses these facilities, cash from operations and cash on hand in a balanced manner to finance its operations.
Genesis has various covenants in place with its lenders with respect to its loan and credit facilities. Such covenants include credit usage restrictions; cancellation, prepayment, confidentiality and cross default clauses; sales coverage requirements; conditions precedent for funding; and other terms such as, but not limited to, maintaining contracted lot prices, restrictions on encumbrances, liens and charges, material changes to project plans and material changes in the Corporation's ownership structure.
Genesis and its consolidated entities were in compliance with all lender covenants for all periods in this MD&A.
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Corporate revolving line of credit
Genesis has a $50,000 corporate revolving line of credit with a major Canadian financial institution at an interest rate per annum of prime +1.65%. This facility is secured by specific dedicated lands and a general corporate charge on all assets of the Corporation, and matures on February 1, 2027. As at March 31, 2025, the amount drawn on this facility was $20,029 (YE 2024 - $13,885).
Demand land project servicing loan
Genesis has a land project servicing facility up to $3,592 with a major Canadian chartered bank at an interest rate per annum of prime +0.50%. This facility is secured by agreements receivable, real estate held for development and sale, and a corporate guarantee, and matures on November 28, 2025. As at March 31, 2025, the amount drawn on this facility was $1,132 (YE 2024 - $3,813).
Demand land project servicing loans for LLLP
LLLP has demand land project servicing facilities up to $22,654 with a major Canadian chartered bank at an interest rate per annum of prime +0.50%. These facilities are secured by specific lands, and a Genesis corporate guarantee, and mature between July 31, 2026 and November 26, 2027. As at March 31, 2025, the amount drawn on these facilities were $4,157 (YE 2024 - $4,318).
Demand land project servicing loan for HLLP
HLLP has a demand land project servicing facility up to $52,135 with a major Canadian chartered bank bearing per annum interest at the prime rate. This facility is secured by specific lands, and a Genesis corporate guarantee, and matures on September 3, 2027. As at March 31, 2025, the amount drawn on this facility was $14,077 (YE 2024 - $12,317).
Demand operating line for LLLP
LLLP has a demand operating credit facility of $24,500 with a major Canadian chartered bank at an interest rate per annum of prime +0.50%. This facility is secured by specific lands, and a Genesis corporate guarantee, and matures on October 27, 2025. As at March 31, 2025, the amount drawn on this facility was $23,711 (YE 2024 - $23,256).
Demand operating line for HLLP
HLLP has a demand operating credit facility up to $17,000 with a major Canadian chartered bank at an interest rate per annum of prime +0.25%. This facility is secured by specific lands, and a Genesis corporate guarantee, and matures on November 30, 2026. As at March 31, 2025, the amount drawn on this facility was $16,411 (YE 2024 - $16,191).
Demand operating line for single-family homes and lots
GBG has a demand operating credit facility of $25,000 bearing interest at prime +0.75% per annum. This facility is secured by housing projects under development and a corporate guarantee. As at March 31, 2025, the amount drawn on this facility was $8,753 (YE 2024 - $8,167). The facility is renewed annually.
VTB mortgages payable
Genesis entered into a $18,088 VTB mortgage payable on the purchase of 460-acres of development land in southeast Calgary in December 2023. The VTB mortgage payable is secured by specific lands, has an interest rate of 0% per annum and is repayable in four equal annual installments of $4,522 each, commencing November 20, 2024 and ending November 20, 2027. The first installment of $4,522 was paid in November 2024. As at March 31, 2025, the VTB mortgage payable had an outstanding balance of $13,566 with an unamortized discount of $1,583 for a net amount of $11,983 (YE 2024 - $13,566 and $1,819 respectively for a net amount of $11,747).
Genesis entered into a $42,080 VTB mortgage payable on the purchase of 734-acres of development land in southeast Calgary. The VTB mortgage payable is secured by specific lands, has an interest rate of 0% per annum and is repayable in four annual installments of $7,000, $8,000, $13,680 and $13,400 respectively, commencing June 19, 2025 and ending June 19, 2028. As at March 31, 2025, the VTB mortgage payable had an outstanding balance of $42,080 with an unamortized discount of $5,964 for a net amount of $36,116 (YE 2024 - $42,080 and $6,676 respectively for a net amount of $35,404).
Genesis entered into a $5,780 VTB mortgage payable on the investment of land development joint venture. The VTB mortgage payable is secured by specific lands, has an interest rate of 0% per annum and is repayable in two annual installments of $2,890, on November 15, 2025 and November 15, 2026. As at March 31, 2025, the VTB mortgage payable had an outstanding balance of $5,780 with an unamortized discount of $434 for a net amount of $5,346 (YE 2024 - $5,780 and $525 respectively for a net amount of $5,255).
Provision for Future Development Costs
When Genesis sells lots, land parcels and homes, it remains responsible for the payment of certain future development costs known as provision for future development costs ("FDC").
In Genesis' land development business, FDC represents the estimated remaining construction and other development costs related to each lot or parcel that has previously been sold by Genesis, if any. These estimated costs include the direct and indirect construction and other development costs, including municipal levies, expected to be incurred by Genesis during the remainder of the development process, net of expected future recoveries from third parties that are allocable to the relevant lot or parcel. FDC is reviewed periodically and, when a prior estimate is known to be different from the actual costs incurred or expected to be incurred, an adjustment is made to FDC and a corresponding adjustment is made to cost of sales and, in some cases, to real estate held for development and sale.
FDC for GBG are estimated future costs relating to previously sold homes, which are primarily for seasonal and other work (such as finishing and landscaping) and estimated warranty expenses over the one-year warranty period.
FDC as at March 31, 2025 was $29,239 for the land division (YE 2024 - $29,423) and $7,036 for GBG (YE 2024 - $6,813). For additional details, see information provided under the heading "Critical Accounting Estimates" in this MD&A.
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LIQUIDITY AND CAPITAL RESOURCES
Genesis had cash and cash equivalents of $24,119 and drawn loan and credit facilities of $140,973 as at Q1 2025 compared to $21,414 and $133,494 respectively as at YE 2024, resulting in net debt (refer to heading “Non-GAAP Measures” in this MD&A) of $116,854 as at Q1 2025 compared to net debt of $112,080 as at YE 2024. The components of loan and credit facilities are detailed below. For additional details, please see information provided under the heading “Loan and Credit Facilities” in this MD&A.
| March 31, | December 31, | |
|---|---|---|
| 2025 | 2024 | |
| Cash and cash equivalents | 24,119 | 21,414 |
| Corporate revolving line of credit | 19,569 | 13,359 |
| Demand land project servicing and home building loans | 9,877 | 11,967 |
| Demand land project servicing and operating lines - LLLP | 27,800 | 27,482 |
| Demand land project servicing and operating lines - HLLP | 30,282 | 28,280 |
| VTB mortgages payable, net of unamortized portions of the discount | 53,445 | 52,406 |
| Total loan and credit facilities | 140,973 | 133,494 |
| Net debt (1) (2) | (116,854) | (112,080) |
(1) Calculated as the difference between cash and cash equivalents and total loan and credit facilities.
(2) Non-GAAP financial measure. Refer to heading “Non-GAAP Measures” in this MD&A.
| March 31, | December 31, | |
|---|---|---|
| Loan and credit facilities as a percentage of total assets (1) | 2025 | 2024 |
| Corporate revolving line of credit | 3.3% | 2.3% |
| Demand land project servicing and home building loans | 1.7% | 2.0% |
| Demand land project servicing and operating lines - LLLP | 4.8% | 4.8% |
| Demand land project servicing and operating lines - HLLP | 5.2% | 4.9% |
| VTB mortgages payable, net of unamortized portions of the discount | 9.1% | 9.1% |
| Loan and credit facilities to total assets | 24.1% | 23.1% |
| Total liabilities to equity (2) | 99.8% | 101.2% |
(1) Calculated as each component of loan and credit facilities divided by total assets.
(2) Calculated as total liabilities divided by total equity.
| March 31, | December 31, | ||
|---|---|---|---|
| Net debt (1) as a percentage of total assets | 2025 | 2024 | % change |
| Cash and cash equivalents | 24,119 | 21,414 | 12.6% |
| Loan and credit facilities | (140,973) | (133,494) | 5.6% |
| Net debt (1) (2) | (116,854) | (112,080) | 4.3% |
| Net debt to total assets (3) | (20.0%) | (19.4%) | 3.1% |
(1) Non-GAAP financial measure. Refer to heading “Non-GAAP Measures” in this MD&A.
(2) Calculated as the difference between cash and cash equivalents and total loan and credit facilities.
(3) Calculated as net debt divided by total assets.
Based on the Corporation's operating history, relationships with lenders and committed sales contracts, management believes that Genesis has the ability to continue to renew or repay its financial obligations as they become due. The Corporation expects to generate sufficient liquidity from its cash flows from operating activities, undrawn credit facilities and cash on hand to meet its financial obligations (including the above liabilities) and commitments as they become due.
Finance Expense
| Three months ended March 31, | ||
|---|---|---|
| 2025 | 2024 | |
| Interest incurred | (1,255) | (1,675) |
| Imputed interest relating to VTB mortgages payable | (1,041) | (304) |
| Financing fees amortized | (117) | (103) |
| Interest and financing fees capitalized | 317 | 627 |
| (2,096) | (1,455) |
Finance expenses were higher in Q1 2025 compared to Q1 2024 mainly due to higher average loan balances. Capitalized interest and financing fees are recorded as a component of real estate held for development and sale.
The weighted average interest rate of loan agreements with various financial institutions was 5.61% (Q1 2024 - 7.82%) based on March 31, 2025 balances.
19
20
Income Tax (Recoverable) Payable
The continuity in income tax recoverable (payable) is as follows:
| Three months ended March 31, 2025 | Year ended December 31, 2024 | |
|---|---|---|
| Balance, beginning of period | 10,091 | 1,706 |
| Provision for current income tax | 1,517 | 14,229 |
| Net payments | (12,437) | (5,844) |
| Balance, end of period | (829) | 10,091 |
As at March 31, 2025, income tax recoverable of $829 is a result of tax on the current income, offset by payments made during the quarter.
Shareholders' Equity
As at May 6, 2025, the Corporation had 56,721,645 common shares issued and outstanding. The common shares of the Corporation are listed for trading on the Toronto Stock Exchange under the symbol "GDC".
The Corporation purchased and cancelled common shares under its NCIBs as follows:
| Three months ended March 31, | ||
|---|---|---|
| 2025 | 2024 | |
| Number of shares purchased and cancelled | 48,194 | 16,800 |
| Total cost | 157 | 40 |
| Average price per share purchased | 3.27 | 2.36 |
| Shares cancelled as a % of common shares outstanding at beginning of period | 0.08% | 0.03% |
During Q1 2025, the Corporation purchased and cancelled 48,194 common shares for $157 at an average cost of $3.27 per share (representing 0.08% of issued and outstanding shares at the beginning of period) compared to 16,800 common shares for $40 at an average cost of $2.36 per share (representing 0.03% of issued and outstanding shares at the beginning of period) in Q1 2024.
The Corporation purchased and cancelled 12,187 common shares between April 1, 2025 and May 6, 2025 for $38 at an average cost of $3.13 per share under the NCIB. As of the date of this MD&A, there are 2,775,412 common shares remaining for purchase under the currently authorized NCIB.
Contractual Obligations and Debt Repayment
Contractual obligations (excluding accounts payable, accrued liabilities, income tax payable, customer deposits, lease liabilities and provision for FDCs) at Q1 2025 were as follows:
| Loan and Credit Facilities (1) | Levies and Municipal Fees | Lot Purchase Commitments (2) | Lease Obligations (3) | Total | |
|---|---|---|---|---|---|
| Current | 48,008 | 10,921 | 12,438 | 237 | 71,604 |
| April 2026 to March 2027 | 54,106 | 11,504 | 23,083 | 240 | 88,933 |
| April 2027 to March 2028 | 34,182 | 7,337 | 1,882 | 394 | 43,795 |
| April 2028 and thereafter | 13,400 | - | - | 7,977 | 21,377 |
| Total | 149,696 | 29,762 | 37,403 | 8,848 | 225,709 |
(1) Excludes deferred fees on loan and credit facilities and unamortized portions of the discount on the VTB mortgages payable.
(2) Lot purchase commitments with third party developers and Partnerships controlled and managed by Genesis.
(3) Includes variable operating costs.
Levies and municipal fees are related to municipal agreements signed by Genesis on commencement of development of certain real estate assets. Non-payment of levies and municipal fees could result in the municipalities drawing upon letters of credit or surety bonds, impact the development of the associated real estate assets and impact Genesis' status as a developer with the municipality. Genesis is current with regard to all levies and fees due to municipal authorities.
Lot purchase commitments are related to the purchase of lots from third party developers and limited partnerships as part of GBG's operations. These contracts generally require an initial deposit with the balance of the contract price being paid at agreed future dates or upon the sale of the lot (and home) to an end user. In the event GBG fails to complete the purchase of lots pursuant to the terms of these lot purchase contracts, any deposits paid would be forfeited as liquidated damages without limiting the third party developer's ability to seek further remedies available at law.
Genesis has certain lease agreements that are entered in the normal course of operations. Genesis' sublease for its head office signed in April 2020 expires in February 2027. The total payments over the remaining term of the office lease for variable operating costs are $454. In the event the office lease is terminated early, Genesis is liable to pay the landlord for the loss of its income for the unexpired portion of the lease, in addition to damages and other expenses incurred by the landlord, if any. Genesis also has other minor operating leases. In October 2024, Genesis signed a 10-year lease for its new head office location, which commences in March 2027 and expires in December 2037. The total estimated payments for its new head office location, including variable operating costs, base rent and parking are $8,394. In the event the office lease is terminated early due to a default by Genesis, Genesis is liable to pay the landlord the aggregate of Basic Rent and Additional Rent (as defined in the lease) for a period of one year, being the estimated time required to re-lease the premises together with any other costs and expenses, including lawyer's fees, incurred by the landlord, if any.
As a normal part of business, Genesis has entered into arrangements and incurred obligations that will impact future operations and liquidity, some of which are reflected as short-term liabilities.
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22
Current Contractual Obligations and Commitments
| March 31, 2025 | December 31, 2024 | |
|---|---|---|
| Loan and credit facilities, excluding deferred fees on loan and credit facilities and unamortized portions of the discount on the VTB mortgages payable | 48,008 | 49,649 |
| Accounts payable and accrued liabilities | 31,522 | 26,795 |
| Accounts payable related to residential lot purchases | 45,359 | 47,889 |
| Total short-term liabilities | 124,889 | 124,333 |
| Levies and municipal fees | 10,921 | 12,769 |
| Lot purchase commitments | 12,438 | 8,054 |
| Lease obligations | 237 | 237 |
| 148,485 | 145,393 |
As at the end of Q1 2025, Genesis had obligations due within the next 12 months of $148,485 of which $48,008 related to loan and credit facilities. Repayment of which is either linked directly to the collection of lot receivables and sales proceeds or due at maturity. Management expects that Genesis will have sufficient liquidity from its cash flows from operating activities, supplemented by undrawn credit facilities and cash on hand, to meet its financial obligations (including the above liabilities) as they become due.
Letters of Credit and Surety Bonds
Genesis has an ongoing requirement to provide irrevocable letters of credit and surety bonds to municipalities as part of the subdivision plan registration process. These letters of credit and surety bonds indemnify the municipalities by enabling them to draw upon them if Genesis does not perform its contractual obligations. At Q1 2025, these amounted to $14,313 (YE 2024 - $9,446).
Levies and Municipal Fees
For additional details, please see information provided under the heading "Contractual Obligations and Debt Repayment" in this MD&A.
Land and Lot Purchase Contracts
For additional details, please see information provided under the heading "Contractual Obligations and Debt Repayment" in this MD&A.
SUMMARY OF QUARTERLY RESULTS
| Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | |
|---|---|---|---|---|---|---|---|---|
| Revenues | 58,209 | 104,647 | 93,131 | 94,978 | 68,305 | 71,602 | 41,173 | 53,188 |
| Net earnings (1) | 6,030 | 12,617 | 12,003 | 8,027 | 6,950 | 8,056 | 2,203 | 4,093 |
| EPS (2) | 0.11 | 0.22 | 0.22 | 0.14 | 0.12 | 0.15 | 0.04 | 0.07 |
(1) Net earnings attributable to equity shareholders.
(2) Net earnings per share - basic and diluted.
| Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | |
|---|---|---|---|---|---|---|---|---|
| Dividends declared and paid | - | 5,679 | - | 5,395 | - | 4,830 | - | 4,833 |
| Dividends declared and paid - per share | - | 0.100 | - | 0.095 | - | 0.085 | - | 0.085 |
| Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | |
| Residential lots sold to third parties (units) | 40 | 89 | 163 | 121 | 92 | 42 | 1 | 45 |
| Residential lots sold through GBG (units) | 25 | 24 | 52 | 50 | 31 | 53 | 43 | 59 |
| Residential lots sold to GBG by Partnerships (units) | - | 44 | - | 60 | - | - | - | - |
| Total residential lots sold (units) | 65 | 157 | 215 | 231 | 123 | 95 | 44 | 104 |
| Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | |
| Homes sold in third party communities (units) | 33 | 65 | 50 | 57 | 54 | 33 | 28 | 10 |
| Homes sold in Genesis communities (units) | 25 | 24 | 52 | 50 | 31 | 53 | 43 | 59 |
| Homes sold in Partnerships communities (units) | 13 | 18 | - | - | - | - | - | - |
| Homes sold (units) | 71 | 107 | 102 | 107 | 85 | 86 | 71 | 69 |
| Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | |
| Development land revenues | - | 12,065 | - | 5,466 | - | 11,958 | - | 4,242 |
| Cash flows (used in) from operating activities | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 |
| Amount | (3,740) | 13,348 | (2,193) | 6,758 | 9,642 | (13,501) | (9,922) | 7,590 |
| Per share - basic and diluted | (0.07) | 0.24 | (0.04) | 0.12 | 0.17 | (0.24) | (0.17) | 0.13 |
In general, revenues and net earnings are mainly affected by the volume of residential lot and home sales, development land parcel sales, and write-downs or reversals of write-downs, if any. Seasonality affects the land development and home building industry in Canada, particularly winter weather conditions. For additional details, please see information provided under the heading "Factors Affecting Results of Operations" in this MD&A which discusses further the factors that affect Genesis' results and seasonality.
During Q1 2025, Genesis sold 40 residential lots to third party builders and 71 homes of which 38 homes were built on Genesis' and Partnerships' lots. Revenues were lower in Q1 2025, compared to Q4 2024, due to lower residential lot sales to third parties, residential home sales and no development land sales during the quarter. Gross margins in Q1 2025 were lower than in Q4 2024 with lower residential lots, residential home and no development land sales all contributing to this. In Q1 2025, the Corporation
recorded $530 as a gain in investments in land development entities, compared to $2,326 in Q4 2024. Selling and marketing expenses were lower in Q1 2025 compared to Q4 2024 while general and administrative expenses were higher in Q1 2025 compared to Q4 2024. The net finance expenses were comparable between Q1 2025 and Q4 2024. Income tax expense was $1,939 in Q1 2025 compared to $4,919 in Q4 2024. As a result of these factors, net earnings were $6,030 in Q1 2025 compared to net earnings of $12,617 in Q4 2024.
During Q4 2024, Genesis sold 89 residential lots to third party builders and 107 homes of which 42 homes were built on Genesis' and Partnerships' lots. Revenues were higher in Q4 2024, compared to Q3 2024, due to higher residential home sales and development land sales. partially offset by lower residential lot sales to third parties during the quarter. Gross margins in Q4 2024 were higher than in Q3 2024 with residential home and development land sales all contributing to this. In Q4 2024, the Corporation recorded $2,326 as a gain in investments in land development entities with no gain recorded in Q3 2024. Selling and marketing expenses were higher in Q4 2024 compared to Q3 2024 while general and administrative expenses and net finance expenses were comparative in Q4 2024 and Q3 2024. Income tax expenses were $4,919 in Q4 2024 compared to $3,592 in Q3 2024. As a result of these factors, net earnings were $12,617 in Q4 2024 compared to net earnings of $12,003 in Q3 2024.
During Q3 2024, Genesis sold 163 residential lots to third party builders and 102 homes of which 52 homes were built on Genesis' lots. Revenues were slightly lower in Q3 2024, compared to Q2 2024, due to there being no development land sales and lower residential home sales, partially offset by higher residential lot sales to third parties during the quarter. Gross margins in Q3 2024 were higher than in Q2 2024 with residential lot sales contributing to this. General and administrative expenses, selling and marketing expenses and net finance expenses were higher in Q3 2024 compared to Q2 2024. Income tax expenses were $3,592 in Q3 2024 compared to $1,281 in Q2 2024. As a result of these factors, net earnings were $12,003 in Q3 2024 compared to net earnings of $8,027 in Q2 2024.
During Q2 2024, Genesis sold 121 residential lots to third party builders and 107 homes of which 50 homes were built on Genesis' lots. Revenues were higher in Q2 2024, compared to Q1 2024, due to higher residential home sales, residential lot sales to third parties and development land sales during the quarter. Gross margins in Q2 2024 were higher than in Q1 2024 with residential home and development land sales all contributing to this. General and administrative expenses, selling and marketing expenses and net finance expenses were marginally higher in Q2 2024 compared to Q1 2024. Income tax expenses were $1,281 in Q2 2024 compared to $2,261 in Q1 2024. As a result of these factors, net earnings were $8,027 in Q2 2024 compared to net earnings of $6,950 in Q1 2024.
During Q1 2024, Genesis sold 92 residential lots to third party builders and 85 homes of which 31 homes were built on Genesis' lots. Revenues were lower in Q1 2024, compared to Q4 2023, due to no development land sales during the quarter, partially offset by higher residential lot sales to third parties and residential home sales. Q1 2024 included no write-down or reversal of write-down, while Q4 2023 included $700 related to reversal of write-downs previously taken. Gross margins in Q1 2024 were higher than in Q4 2023 with residential lots and residential home sales all contributing to this. In Q1 2024, there was no change in the fair value of the Corporation's investments in land development entities, while a gain of $1,106 was recorded in Q4 2023. General and administrative expenses and selling and marketing expenses were higher in Q1 2024 compared to Q4 2023. Income tax expenses were $2,261 in Q1 2024 compared to $2,246 in Q4 2023. As a result of these factors, net earnings were $6,950 in Q1 2024 compared to net earnings of $8,056 in Q4 2023.
During Q4 2023, Genesis sold 42 residential lots to third party builders and 86 homes of which 53 homes were built on Genesis' lots. Revenues were higher in Q4 2023, compared to Q3 2023, due to higher residential home sales, residential lot sales to third parties and development land sales during the quarter. Q4 2023 included $700 related to reversal of write-downs previously taken, while there were no write-downs or reversal of write-downs in Q3 2023. Gross margins in Q4 2023 were higher than in Q3 2023 with residential lots, residential home and development land sales all contributing to this. In Q4 2023, the Corporation recorded $1,106 as a gain in investments in land development entities with no gain recorded in Q3 2023. Selling and marketing expenses and net finance expenses were higher compared to Q3 2023. Income tax expenses were $2,246 in Q4 2023 compared to $807 in Q3 2023. As a result of these factors, net earnings were $8,056 in Q4 2023 compared to net earnings of $2,203 in Q3 2023.
During Q3 2023, Genesis sold one residential lot to third party builders and 71 homes of which 43 homes were built on Genesis' lots. Revenues were lower in Q3 2023, compared to Q2 2023, due to lower residential lot sales to third parties, lower residential home sales, and no development land sales during the quarter. Gross margins in Q3 2023 were lower than in Q2 2023. General and administrative expenses and net finance expenses were higher compared to Q2 2023. Income tax expenses were $807 in Q3 2023 compared to $1,070 in Q2 2023. As a result of these factors, net earnings were $2,203 in Q3 2023 compared to net earnings of $4,093 in Q2 2023.
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During Q2 2023, Genesis sold 45 residential lots to third party builders and 69 homes of which 59 homes were built on Genesis' lots. Revenues were higher in Q2 2023, compared to Q1 2023, due to higher residential home sales, residential lot sales to third parties and a development land sale during the quarter. Gross margins in Q2 2023 were higher than in Q1 2023. General and administrative expenses and net finance expenses were lower while selling and marketing expenses were higher in Q2 2023 compared to Q1 2023. Income tax expenses were $1,070 in Q2 2023 compared to $39 in Q1 2023. As a result of these factors, net earnings were $4,093 in Q2 2023 compared to net earnings of $160 in Q1 2023.
SUBSEQUENT EVENTS
Subsequent to March 31, 2025, the following occurred:
a) The Corporation had previously received ASP approval for the OMNI project. In April 2025 the Corporation received approval of a conceptual scheme for this project from the County.
b) On May 6, 2025, the Corporation declared a dividend of $0.105 per common share for a total of $5,956, payable on May 27, 2025, to shareholders of record on May 16, 2025.
SUMMARY OF ACCOUNTING CHANGES
The Corporation adopted no new IFRSs or interpretations as of January 1, 2025.
CRITICAL ACCOUNTING ESTIMATES
The preparation of consolidated financial statements in accordance with IFRS requires management to make judgments and estimates that affect the reported amounts of revenues, expenses (including stock-based compensation), assets and liabilities, and the disclosure of contingent liabilities at the reporting date for the land development and the home building businesses. On an ongoing basis, management evaluates its judgments and estimates in relation to revenues, expenses, assets and liabilities. Management uses historical experience, third party appraisals and reports and various other factors it believes to be reasonable under the given circumstances as the basis for its judgments and estimates. Actual outcomes may differ from these estimates under different assumptions and conditions. There were no material changes made to the critical accounting estimates for Q1 2025 and Q1 2024. Refer to note 2(r) in the consolidated financial statements for the years ended December 31, 2024 and 2023 for additional information on judgments and estimates.
Provision for Future Development Costs
Changes in estimated FDCs, which are generally obtained from third party service providers, directly impact the amount recorded for the future development liability, cost of sales, gross margin and, in some cases, the value of real estate under development and held for sale. This liability is subject to uncertainty due to the long time frames involved, specifically in land development.
Reversal of Write-down / Write-down of Real Estate Held for Development and Sale
The Corporation estimates the net realizable value ("NRV") of real estate held for development and sale at least annually or whenever events or changes in circumstances indicate the carrying value may exceed NRV. The estimate is based on valuations conducted by independent real estate appraisers, other professional reports and estimates and takes into account recent market transactions of similar and adjacent lands and housing projects in the same geographic area.
Valuation of Amounts Receivable
Amounts receivable are reviewed on a regular basis to estimate recoverability of balances. Any overdue amounts and any known issues about the financial condition of debtors are taken into account when estimating recoverability.
Investments in Land Development Entities
The fair value of investments in land development entities are based on the market approach method. This method uses prices and other relevant information that have been generated by market transactions involving identical or comparable assets.
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INTERNAL CONTROL OVER FINANCIAL REPORTING
The Chief Executive Officer and Chief Financial Officer of the Corporation have designed Genesis' Disclosure Controls and Procedures ("DC&P") and Internal Control over Financial Reporting ("ICFR") and certified that Genesis' DC&P and ICFR were effective as at March 31, 2025.
There were no changes in the Corporation's ICFR during the three months ended March 31, 2025 that have materially affected or are reasonably likely to materially affect the Corporation's ICFR.
RISKS AND UNCERTAINTIES
In the normal course of business, Genesis is exposed to certain risks and uncertainties inherent in the real estate development and home building industries. Real estate development and home building are cyclical and capital-intensive businesses. As a result, the profitability and liquidity of Genesis could be adversely affected by external factors beyond the control of management. Risks and uncertainties faced by Genesis include industry risk, competition, supply and demand, geographic risk, development and construction costs, credit and liquidity risks, finance risk, interest risk, management and key personnel risk, mortgage rates and financing risk, general uninsured losses, cyber-security and business continuity risk, environmental risk and government regulations.
In Q1 2025, the Alberta economy continued to grow driven by population gains, relative housing affordability and supportive commodity markets. This was somewhat offset by economic uncertainty, increasing home prices, relatively higher lending rates and continued inflationary pressures that weighed on demand. Given the volatile economy, it is not possible to reliably estimate the length and overall impact of these developments and the impact on the financial results and condition of the Corporation in future periods.
There may be additional risks that management may need to consider from time to time. For a more detailed discussion on the Corporation's risk factors, refer to Genesis' AIF for the year ended December 31, 2024 available on SEDAR+ at www.sedarplus.ca.
NON-GAAP MEASURES
Non-GAAP measures do not have any standardized meaning according to IFRS, and therefore may not be comparable to similar measures presented by other reporting issuers.
Net debt is a non-GAAP measure and, therefore, may not be comparable to similar measures presented by other reporting issuers. Net debt is calculated as the difference between cash and cash equivalents and loan and credit facilities. Management believes that net debt is an important measure to monitor leverage and evaluate the balance sheet. The most comparable GAAP financial measure is loan and credit facilities.
The table below shows the calculation of net debt:
| March 31, 2025 | December 31, 2024 | |
|---|---|---|
| Cash and cash equivalents | 24,119 | 21,414 |
| Loan and credit facilities | 140,973 | 133,494 |
| Net debt | (116,854) | (112,080) |
OTHER
Additional information relating to the Corporation can be found on SEDAR+ at www.sedarplus.ca.
ADVISORIES
Cautionary Note Regarding Forward-Looking Statements
This MD&A contains certain statements which constitute forward-looking statements or information ("forward-looking statements") within the meaning of applicable securities legislation, including Canadian Securities Administrators' National Instrument 51-102 - Continuous Disclosure Obligations, concerning the business, operations and financial performance and condition of Genesis. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "proposed", "scheduled", "future", "likely", "seeks", "estimates", "plans", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved".
Although Genesis believes that the anticipated future results, performance or achievements expressed or implied by forward-looking statements are based upon reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements because they involve assumptions, known and unknown risks, uncertainties and other factors many of which are beyond the Corporation's control, which may cause the actual results, performance or achievements of Genesis to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements. Accordingly, Genesis cannot give any assurance that its expectations will in fact occur and cautions that actual results may differ materially from those in the forward-looking statements.
Forward-looking statements are based on material factors or assumptions made by us with respect to, among other things, opportunities that may or may not be pursued by us; changes in the real estate industry; fluctuations in the Canadian and Alberta economy; changes in the number of lots sold and homes delivered per year; and changes in laws or regulations or the interpretation or application of those laws and regulations. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Forward-looking statements in this MD&A and factors that could cause actual results to differ materially from such statements include, but are not limited to, those outlined in the following table:
| Forward-looking statements in this MD&A include, but are not limited to:
- the availability of excess cash on hand and its proposed use;
- the future exercise of any right to purchase;
- the timing and approval of the conceptual scheme for the OMNI ASP, and timing of completion of an interchange to provide primary transportation access to these lands;
- the anticipated number of housing units in the various communities upon completion;
- the expected completion dates of various projects that GBG is currently engaged in, the timeline for pre-construction homes and anticipated lot yields for projects under development;
- plans and strategies surrounding the acquisition of additional land;
- commencement of the servicing phase and the construction phase of various communities and projects;
- the financing of Genesis' business, including community and project phases, and expected increased leverage;
- anticipated general economic and business conditions, including forecasted economic growth;
- potential changes, if any, to the federal mortgage lending rules and other rules that may impact home ownership in Canada;
- expectations for lot and home prices;
- construction starts and completions;
- FDCs;
- anticipated expenditures on land development activities;
- GBG's sales process and construction margins;
- common share buybacks;
- the payment of dividends; and
- the ability to continue to renew or repay financial obligations and to meet liabilities as they become due. | Factors that could cause actual results to differ materially from those set forth in the forward-looking statements include, but are not limited to:
- the impact of contractual arrangements and incurred obligations on future operations and liquidity;
- local real estate conditions, including the development of properties in close proximity to Genesis' properties and the strength and growth of the Calgary economy;
- the uncertainties of real estate development and acquisition activity;
- fluctuations in interest and inflation rates;
- the ability to access and raise capital and debt financing on favorable terms, or at all;
- not realizing on the anticipated benefits from transactions or not realizing on such anticipated benefits within the expected time frame;
- the cyclicality of the oil and gas industry;
- changes in the Canadian / US dollar exchange rate;
- labour matters;
- product availability due to supply chain issues and (or) cost increases;
- governmental laws and regulations;
- general economic and financial conditions;
- stock market volatility; and
- other risks and factors described from time to time in the documents filed by Genesis with the securities regulators in Canada available at www.sedarplus.ca, including in this MD&A under the heading "Risks and Uncertainties" and the AIF under the heading "Risk Factors". |
| --- | --- |
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The forward-looking statements contained in this MD&A are made as of the date of this MD&A, based only on information currently available to us, and, except as required by applicable law, Genesis does not undertake any obligation to publicly update or to revise any of the forward-looking statements, whether as a result of new information, future events or otherwise.
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