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Brookfield Real Estate Services Inc. Reports Fourth Quarter And 2012 Year-end Results; Monthly Dividend

Stocks in this article: BRE

TORONTO, March 5, 2013 /CNW/ - Brookfield Real Estate Services Inc. (the Company) (TSX: BRE), a leading provider of services to residential real estate brokers and their REALTORS®¹, today announced that cash flow from operations ("CFFO") for the three and twelve months ended December 31, 2012 was $5.4 million or $0.42 per restricted voting share ("Share"), the same level as 2011 and $25.4 million or $1.98 per Share, up slightly from $25.3 million or $1.97 per Share for the same period in 2011.

Royalties for the three and twelve months ended December 31, 2012 were $8.1 million and $36.5 million, respectively, compared to $8.4 million and $36.7 million, respectively for the same period in 2011. Net earnings for the three and twelve months ended December 31, 2012 was $0.8 million and $3.0 million, or $0.08 and $0.31 earnings per Share, respectively, as compared to net loss and earnings of $3.2 million and $8.0 million or $0.33 loss and $0.85 earnings per Share, respectively, for the same period in 2011.

OVERVIEW OF FOURTH QUARTER OPERATING RESULTS During the Quarter the Company generated CFFO of $5.4 million, which was in Iine with the same period of 2011. Royalties were down slightly due in part to the pushing of market activity to the first half of 2012 as compared to the same period in 2011 as a result of the tightening of mortgage-lending rules. Offsetting this decrease was a $0.3 million reduction in administration costs due primarily to a lower year over year bad debt provision resulting from the success of increased collection efforts.

For the twelve months ended December 31, 2012, the Canadian market transactional dollar volume of $165.1 billion decreased by 1% from the same period in 2011, driven solely by a decrease in units sold. The average sales price of a home remained largely unchanged due primarily to a balanced market supported by reduced listings and low interest rates. For the three months ended December 31, 2012, the Canadian market transactional dollar volume was down 9% over the same period in 2011, also driven solely by a decrease in home sale activity.

"The Canadian real estate market was challenged in 2012 as more stringent mortgage regulations temporarily squeezed younger buyers out of the market, while the overhang of economic malaise across Europe and the US continued to unsettle consumer confidence," said Phil Soper, President and Chief Executive Officer, Brookfield Residential Real Estate Services Inc. "Despite these concerns, the slowing of Canadian market activity, which began in the second quarter of 2012, has been moderate. We anticipate that the industry will strengthen towards the end of 2013."

The Company's revenue is primarily fixed in nature, based on the number of REALTORS® in the network. This structure provides revenue protection from the impact of revenue declines when the market cools, but also reduces the degree to which the Company participates in periods of rapid market expansion.

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