Madison Pacific Properties Inc. announces the results for the six months ended February 29, 2024
April 12 2024 - 7:19PM
Madison Pacific Properties Inc. (the Company) (TSX: MPC and MPC.C),
a Vancouver-based real estate company announces the results of
operations for the six months ended February 29, 2024.
The results reported are pursuant to
International Financial Reporting Standards (IFRS) for public
companies.
For the six months ended February 29, 2024, the
Company is reporting net loss of $43.4 million (2023: net
income of $23.0 million); cash flows generated from operating
activities before changes in non-cash operating balances of $4.3
million (2023: $4.6 million); and loss per share of $0.73 (2023:
income per share of $0.38). Included in net loss is a provision of
$50.2 million (2023: $nil) for uncertain tax positions recognizing
a tax liability for unpaid taxes, estimated interest and awarded
legal costs and provisions against the carrying value of the
Company’s tax deposits and deferred tax assets related to unused
carryforward amounts. Also included in net loss is a net gain on
the fair value adjustment on investment properties of approximately
$4.3 million (2023: $14.0 million).
As previously reported in the Company’s
Consolidated Financial Statements, the Company and certain
subsidiaries had received from the Canada Revenue Agency (“CRA”)
and Alberta Tax and Revenue Administration (“ATRA”) tax notices of
reassessment for various taxation years. The reassessments deny the
application and usage of certain non-capital losses, capital
losses, deductions and investment tax credits arising from prior
years. The Company and its subsidiaries had filed notices of
objection and notices of appeal to the reassessments with the CRA
and ATRA.
The appeal with the Tax Court of Canada (“TCC”)
for one of the reassessed companies, Madison Pacific Properties
Inc., was heard in 2020, 2022 and in 2023 (the “MPP Appeal”). The
TCC released its judgement on the MPP Appeal on December 27, 2023
in favour of the CRA’s position, confirming the CRA’s
reassessments. The decision denied Madison Pacific Properties
Inc.’s ability to use certain carryforward losses for certain
taxation years within its 2009 to 2017 taxation years. On January
26, 2024, the Company filed a notice of objection to the Federal
Court of Appeal to appeal the decision issued by the TCC.
Based on the decision of the TCC in respect of
the MPP Appeal and other related factors, including the accounting
criteria under IFRS regarding tax contingencies, the Company has
recorded a full provision against the carrying value of the tax
deposits and deferred tax assets related to unused carryforward
amounts and a liability for uncertain tax positions for unpaid
taxes and estimated interest for all three tax reassessments
totalling $50.2 million. The total amount of $50.2 million was
recognized to income tax expense of $36.7 million and interest
expense and other costs on uncertain tax positions of $13.5 million
in the Interim Consolidated Statement of (Loss) Income and
Comprehensive (Loss) Income for the six months ended February 29,
2024. As at the date of this Press Release, the Company and its
subsidiaries have paid a total of $49.3 million to the CRA and ATRA
for the taxes and estimated interest the CRA and the ATRA claimed
are owed.
The Company will continue to evaluate its
defense positions in respect of the two other reassessed
subsidiaries.
As at February 29, 2024, the Company owns
approximately $709 million in investment properties, including the
Company’s proportionate share of investment properties held through
joint operations.
As at the date of this Press Release, the
Company’s investment portfolio comprises 56 properties with
approximately 1.9 million rentable sq. ft. of industrial and
commercial space and a 50% interest in four multi-family rental
properties with a total of 151 units. Approximately 98.57% of
available space within the industrial and commercial investment
properties is currently leased. The Company’s development
properties include a 50% interest in the Silverdale Hills Limited
Partnership which currently owns approximately 1,400 acres of
primarily residential designated development lands in Mission,
British Columbia.
For a review of the risks and uncertainties to
which the Company is subject, see its most recently filed annual
and interim MD&A.
Contact: |
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Mr. John Delucchi |
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Ms. Bernice Yip |
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President & CEO |
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Chief Financial Officer |
Telephone: |
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(604) 732-6540 |
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(604) 732-6540 |
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Address: |
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389 West 6th Avenue |
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Vancouver, B.C. V5Y 1L1 |
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