DREAM Unlimited (DRM) Q3 2024 earnings summary

Executive summary

• Assets under management reached $27 billion, up over 50% since end of 2022, driven by organic growth, new mandates, and the pending acquisition of nearly 3,000 rental units from ERES for €695 million.

• Western Canada development business is on track for a record year, with $190 million in additional revenue secured through 2025 and strong presales.

• Core businesses—Western Canada development, income properties, and asset management—are performing well, with high presales, robust leasing, and 97% occupancy in stabilized rentals.

• Sale of Arapahoe Basin ski hill to Alterra Mountain Company is pending, with an estimated after-tax profit of $110 million and a planned $1.00/share special dividend upon closing.

• Strong liquidity position of $257 million and conservative leverage at 39% support ongoing investments and growth.

Financial highlights

• Q3 2024 revenue was $95.7 million, down from $132.5 million in Q3 2023; nine-month revenue rose to $432.2 million from $279.1 million year-over-year.

• Standalone pre-tax loss of CAD 1.9 million in Q3, compared to pre-tax earnings of CAD 11.4 million last year, mainly due to timing of lot sales and reduced development activity.

• Standalone FFO per share for Q3 2024 was $0.09, down from $0.42 in Q3 2023; nine-month FFO per share rose to $1.63 from $0.81 year-over-year.

• Book value per share stands at $29.41 as of September 30, 2024.

• Returned $6.5 million to shareholders in Q3 through dividends and share buybacks.

Outlook and guidance

• Q4 expected to be strong, with CAD 112 million in revenue to be recognized from presales.

• Over 2,700 residential rental units in the pipeline for the Greater Toronto Area, National Capital Region, and Western Canada by 2027, with most under construction.

• Expects to complete at least CAD 200 million of income properties annually for the next four years.

• Anticipated closing of Arapahoe Basin sale and ERES acquisition to further strengthen balance sheet and recurring income.

• Management remains cautious due to macroeconomic and geopolitical uncertainties but is positioned to capitalize on opportunities.