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Toronto, Ontario--(Newsfile Corp. - April 9, 2025) - Impact Development Group Inc. (TSXV: IMPT) ("Impact", "IDG" or the "Company"), a leading Panamanian developer of affordable housing solutions, has released its financial results for the year ended December 31, 2024. IDG's audited consolidated financial statements (the "Financial Statements") and related management's discussion and analysis (the "MD&A") for the twelve months ended December 31, 2024 are available on www.sedarplus.ca. Unless otherwise indicated, all amounts and references to currency in this news release are references to United States dollars.
Annual Financial Results
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Revenue for the twelve months ended December 31, 2024 was $3,698,059, a 36.15% decrease compared to the same period in 2023. The decrease was primarily driven by the sale of fewer houses in the year ended December 31, 2024 (56 houses) compared to the year ended December 31, 2023 (85 houses).
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Cost of sales for the twelve months ended December 31, 2024 was $9,598,660, a 0.78% decrease compared to the same period in 2023. This is primarily driven by fewer home deliveries in the 2024 compared to 2023 partly offset by higher write-off of inventory to net realizable in 2024 compared to 2023. The higher write-off of inventory in 2024 is driven by slower moving inventory and slower construction activity in 2024 compared to 2023.
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The net loss of $22,336,913 for the year ended December 31, 2024 included a $10,348,525 of impairment of the land held for development, largely driven by the changes to the Solidarity Bonus Subsidy Program (the "Program") operated by the Ministry of Housing of the Government of Panama ("MIVIOT") and $1,540,437 of impairment of goodwill of acquired assets. Excluding these impairments, the net loss for the year ended December 31, 2024 is $10,447,951. The net earnings of $13,125,437 for the year ended December 31, 2023 included a $25,390,556 gain on settlement of debt with certain creditors as part of the Company's reverse takeover transaction to acquire Impact Housing Corporation, which closed on November 30, 2023 (the "RTO Transaction"). Excluding this gain, the net loss for the year ended December 31, 2023 is $12,265,119. The decrease of net loss of $1,817,168 (comparing $10,447,951 loss for year ended December 31, 2024 against $12,265,119 for the year ended December 31, 2023) is primarily due to higher write-off of receivables, higher share based compensation and higher interest expense in 2023 partly offset by higher operating loss in 2024, accretion expense and financing costs related to new and renewed debt agreements.
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Operating expenses stayed relatively consistent in the year ended December 31, 2024 compared to the year ended December 31, 2023. There was a slight increase in overhead and administrative expenses driven by higher by higher audit expense and public company compliance requirements and higher provision for warranties in 2024 partly offset by higher professional and legal expenses in 2023 in connection with the initial public offering in 2023.
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Interest expenses decreased from $3,021,157 in the year ended December 31, 2023 to $704,536 in the year ended December 31, 2024. In 2022, majority of the interest related to Multibank credit facilities was capitalized as the houses for which financing was taken were under construction. The houses were delivered in 2023 however, the loans funding these houses have not been repaid as at December 31, 2023 and thus interest was reclassed as interest expense. The construction activity was lower in 2024 compared to 2023 driving the decrease in the interest expense in 2024 compared to 2023.
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Share-based compensation for the year ended December 31, 2023 of $1,377,673 corresponds to warrants and restricted share units ("RSUs") issued to management as part of the RTO Transaction on November 30, 2023. Warrants fully vested on the RTO Transaction date and amounted to $1,337,974 of the total expense. Share-based compensation for the year ended December 31, 2024 of $650,715 corresponds to the expense on the RSUs which vest 25% every six months over two years from the RTO Transaction's closing date.
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Total assets decreased by at December 31, 2024 compared to December 31, 2023 primarily due to decrease in the property and other inventories and the land held for development. Property and other inventories decreased by $5,260,272 at December 31, 2024 compared to December 31, 2023 primarily due to higher write-down of costs to net realizable value driven by slower moving inventory and slower construction activity in 2024 compared to 2023. The significant decrease of land held for development from $13,897,177 at December 31, 2023 to $3,497,938 at December 31, 2024 is due to an impairment of land held at the Company's Sona project for 10,348,525. These are driven by the unfavorable macro economic environment and decreasing prospects and profitability of future social interest housing programs in the market due to the termination of the Program by MIVIOT effective July 1, 2024.
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The significant decease in property and other inventories from December 31, 2023 to December 31, 2024 is due to higher write-down of costs to net realizable value driven by slower moving inventory in 2024 and slower construction activity in 2024 compared to 2023.
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At December 31, 2024, the Company had cash and cash equivalents of $330,708 and working capital of $2,598,862.