Despite a not-so-strong performance in the third quarter, real estate finance company Terra Firma Capital said that the coronavirus recession had failed to take the wind out of its sails.
Publishing its three and nine-month financial results on Wednesday, the publicly-traded finance firm reported that its revenues decreased 1.3% to $4.1 million in the first three months of 2020, compared to $4.2 million during the same period a year ago. Terra Firma’s nine-month profit also dipped 1.3% to $11.9 million versus its $12 revenue in 2019.
Overall, the firm’s adjusted net income and comprehensive incomenbsp;dropped 2.6% to $884,000.
Terra Firma CEO Glenn Watchorn expects the coronavirus-induced housing boom to have a delayed effect on the company.
“While the US housing sector continues to be one of the few shining stars during the COVID-19 crisis, the benefit to the company will have a delayed effect given the faster repayments from borrowers experiencing higher sales volumes and the halt in new originations in the first half of the year for precautionary measures,” he said. “These higher sales volumes are, however, leading to a significant increase in the demand for new housing lots and in turn, financing for new land developments.”
The decrease in revenue was partially offset by an increase in interest and fees of $1.2 million from new loans funded after September 30. As for the nine-month period, $3.1 million of interest and fees from new loans made up for the decrease, along with $481,000 of additional interest earned from existing loans.