TORONTO–(BUSINESS WIRE)–Accord Financial Corp. (TSX “ ACD) today released its financial results for the quarter ended September 30, 2024. Financial figures presented in this release are reported in Canadian dollars and adjusted accordingly. On International Financial Reporting Standards.
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SUMMARY OF FINANCIAL RESULTS |
The three months ended on September 30 |
|
|
|
2024 |
2023 |
|
|
$ |
$ |
|
Estimated funds used (millions) |
427 |
478 |
|
Income (000s) |
21,213 |
19,430 |
|
Net loss attributable to shareholders (000s) |
(772) |
(8,806) |
|
Adjusted net profit (loss) (000s) (note) |
(1,329) |
127 |
|
Loss per share (basic and diluted) |
(0.09) |
(1.03) |
|
Adjusted earnings (loss) per common share (basic and diluted) |
(0.16) |
0.01 |
|
Book value per share (September 30) |
$9.69 |
$10.76 |
Commenting on the events of the third quarter, the Company’s CEO, Mr. Simon Hitzig, said: We continue to implement important initiatives, closing the sale of the AEF leasing portfolio on September 30, which is an important step to refocus on the Company’s core businesses. . Net operating income, excluding customer protection deposits, was $61.1 million (US$45.2 million), representing a 9.5% premium over the portfolio’s carrying value of $55.8 million (US$41.2 million). After deducting transaction costs and related intangible assets ($3.0 million), the sale resulted in a pre-tax gain of $1.1 million. This transaction strengthens the market value of Accord’s assets, and its platform, despite challenging conditions from the fourth quarter of 2023, added Mr. Hitzig.
After the sale of leased assets, finance receivables and loans (finances leased) closed at $380 million on September 30, 2024, down from $477 million at the beginning of the year. Average revenue for the third quarter was $427 million compared to $478 million in the same period last year. Despite the year-over-year decline in capital expenditures, higher average yields and gains on lease sales drove third-quarter revenue to $21.2 million, while first-nine-month revenue rose 10.8% to $61.8 million compared to $55.8 million in the same quarter. time last year.
The company is also making progress in reducing operating costs, holding steady year-over-year growth despite $1.8 million in professional fees associated with bank negotiations. However, interest costs, including higher rates combined with amendment payments received in the first quarter (payable until July 2025), continue to weigh on results. The provision for credit losses, at $ 4.7 million per quarter, is clearly improved from the unusual $ 14.4 million in the third quarter of 2023. Within the provision, $1.9 million represents a non-cash increase in the loss allowance, which now stands at $11.1 million.
Although the sale of the AEF asset was profitable, and the Company recorded an operating profit for the prior arrangement, the provision for credit losses gave the Company a third quarter net loss attributable to shareholders of $772,000. The net loss for the year to date attributable to shareholders was $1.3 million, a significant improvement from a net loss of $7.1 million in the same period last year. The adjusted loss, which excludes the gain on the sale of leased assets, is $562,000 for the year to date, or 7 cents per common share. Compared to the year-to-date operating loss, the successful sale of leased assets boosted net book value per share to $9.69 on September 30, from $9.45 at the beginning of the year.
Commenting further Mr. Hitzig noted, Prepaid performance improved in the third quarter, paving the way back to profitability. But in the meantime, the difficult business environment is weighing heavily on our core market segments, causing more provision for credit losses. Mr. Hitzig added, We continue to focus on our strategic initiatives, including potentially significant asset sales, aimed at strengthening the balance sheet, streamlining the business, and repositioning for success going forward.
About Accord Financial Corp.
Accord Financial is North America’s largest commercial finance company providing fast, flexible financing solutions including asset-backed lending, inventory, escrow, equipment finance (Canada), trade finance and film/media finance. Using our unique combination of financial strength, deep knowledge and independent thinking, we create winning financial solutions for small and medium-sized businesses, delivered easily, so that our clients can thrive.
Note: Non-IFRS measures
The Company’s financial statements have been prepared in accordance with IFRS. The Company uses other financial measures to evaluate its performance and believes that these measures may be useful to investors in evaluating the Company’s performance and financial condition. These measures may not have standard definitions or calculations as determined by IFRS that will ensure consistency among companies using these measures, therefore, they are considered non-IFRS measures. The non-IFRS measures presented in this press release are as follows:
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1) |
Adjusted net profit, adjusted net loss, and adjusted EPS/LPS. The Company derives these measures from the amounts presented in its financial statements prepared in accordance with IFRS. Adjusted comprehensive income (loss) includes net income of shareholders before impairment, loss on one account only (in 2023), professional fees related to bank negotiations (in 2024), gain on sale of AEF, stock-based compensation, business acquisition costs (especially paying money). of intangible assets) and restructuring costs. Adjusted EPS/LPS (basic and diluted) is adjusted net profit (loss) divided by the weighted average number of common shares outstanding (basic and diluted) for the period. Management believes that adjusted gross profit (loss) is the most appropriate measure of operating performance as it excludes items unrelated to continuing operations. The following table provides a reconciliation of the Company’s net income (loss) and adjusted net income (loss): |
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|
Three Months Ended Sept 30 |
|
|
|
2024 |
2023 |
|
|
$’000 |
$’000 |
|
Shareholders’ equity (loss) |
(772) |
(8,806) |
|
Adjustment, total tax: |
|
|
|
Profit from AEF sales |
(785) |
– |
|
Costs associated with closing a single account |
160 |
8,398 |
|
Reorganization and other expenses |
68 |
535 |
|
Adjusted net profit (loss) |
(1,329) |
127 |
|
2) |
Book value per share “ book value is shareholders’ equity and is equal to the value of the total assets (calculated as total assets minus total liabilities) of the Company’s non-controlling interests. Book value per share is the book value or stockholders’ equity divided by the number of common shares outstanding as of a certain date. |
|
3) |
Funds used are the Company’s financial receivables and loans, IFRS measurement. Average leverage is an average of earnings and loans calculated over a period of time. |
Forward-Looking Statements
This news release contains “forward-looking statements” and certain “forward-looking information” as defined under applicable Canadian securities laws. Forward-looking statements can be identified by the use of forward-looking words such as “may”, “will”, “anticipate”, “intend”, “estimate”, “anticipate”, “believe”, “continue”, “plans” or similar words. Forward-looking statements in this news release include, but are not limited to, statements, management’s beliefs, expectations or intentions regarding the Company’s financial condition, and the timing of the quarterly dividend announced in November 2023. Forward-looking statements are based on forecasts of future results, unspecified price estimates and assumptions that although management believing that they are reasonable, they are naturally subject to important business, economic and competitive uncertainties and emergencies. Forward-looking statements are subject to various risks and uncertainties including the Company’s ability to recover earnings and those risks identified in periodic filings with Canadian securities regulators. See Accord’s latest annual information form and recent management’s discussion and analysis of results of operations and financial condition for a detailed discussion of the risk factors affecting Accord. Such forward-looking information represents management’s best judgment based on currently available information. No forward-looking statement can be guaranteed and actual future results may differ materially. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information.
View the source version at businesswire.com:
For more information please visit www.accordfinancial.com or contact:
Irene Eddy
Senior Vice President, Chief Financial Officer
Accord Financial Corp.
40 Eglinton Avenue East, Suite 602
Toronto, ON M4P 3A2
(416) 961-0304
ieddy@accordfinancial.com
Source: Accord Financial Corp.
