Good morning, ladies and gentlemen, and welcome to the annual shareholder meeting for Melcor Developments Limited. My name is Robin Sellick, and I'm pleased to act as moderator of this meeting. In the room with me today are Tim Melton, CEO and Chair of the Board, and Naomi Stefura, our COO and CFO. We are pleased to host this meeting entirely online. As all matters have achieved sufficient votes to be passed, we will move quickly through the formal requirements of the meeting with Naomi and I acting as motioner and seconder. Following this formal component, Naomi will provide a brief company update. Before turning the meeting over to Tim to chair the formal portion of the meeting, we have a few housekeeping items to attend to. Melcor uses the notice-and-access model for delivery of meeting materials to our shareholders.
As such, shareholders receive instructions on how to access materials related to the meeting electronically. We also provide instructions on how to request a physical copy be sent to you. You will find meeting materials, including the information circular and annual financial statements, on the website at melcor.ca/2024agm. When it comes to financial results, we report in Canadian dollars and in accordance with IFRS. We supplement our financial reporting with non-standard measures, including funds from operations and net operating income. We believe these measures are important in evaluating our performance, but caution listeners that they may not be comparable to similar measures presented by other companies. These non-standard measures are defined and reconciled in our MD&A. Note that proxy votes received in advance of the meeting are sufficient to pass all matters on the agenda, and we have reached quorum for the meeting.
If you voted your proxy in advance, you do not need to take any action today, as your shares have already been counted. That said, your vote does matter, and registered shareholders and those beneficial shareholders who followed the process noted in our information circular will be able to vote electronically while the polls are open. If you are logged in on the Lumi platform, the voting page will automatically appear in the left side window when we open the poll. The vote will remain open until the electronic polls are closed at the adjournment of the formal business. You may vote on any of the three matters at any time while the polls are open. Votes are submitted automatically when you select for or withhold or against on each resolution. Q&A. Following management's presentation, there will be an opportunity to ask questions.
Shareholders and guests may ask a question at any time during the meeting by clicking on the messaging icon at the top of the Lumi window. Note that we may paraphrase questions for brevity and clarity and may aggregate responses where similar questions are asked. Finally, I will remind you that certain statements made during this call may be forward-looking. For a complete discussion of items that may cause actual results to differ, please refer to the business environment and risk section of our annual MD&A. I'll now turn the meeting over to Chief Executive Officer and Board Chair, Tim Melton, to chair the meeting.
Thank you, Robin. I'll just, before I start, mention that our team is here in Edmonton, looking out at rather cloudy skies this morning, and it may be appropriate that the skies are a little cloudy after last night's Oilers hockey game. We were very proud of the team that went so far and came back from down 3 games, and the city's very proud, and we feel that we got a good shot at them next year. With that, I will also warmly welcome our webcast audience for our 55th annual meeting of shareholders following the conclusion of our 100th year of operation. The meeting is now called to order. I will chair this meeting, and Naomi Stefura will act as secretary. Gloria Gherasim of Odyssey Trust Company will act as scrutineer.
I will instruct Odyssey Trust Company to open the polls for this meeting and keep them open until the meeting is adjourned. Shareholders or duly appointed proxy holders who are logged in to this meeting will now be able to see the motions to be brought before this meeting. You may vote at any time until the polls close. Notice of this annual meeting of shareholders was sent to all shareholders of record. I have the affidavit of mailing, which indicates a mailing date of May twenty-fourth, twenty twenty-four, as proof that the notice of this meeting has been properly served. It is certified by our transfer agent. As such, I request a motion dispensing with the reading of the notice.
I move that the reading of the notice be dispensed with.
I second the motion.
Thank you, ladies. I will ask the secretary to keep a copy of the notice of proof of mailing with the records of this meeting. As a reminder, the vote is open for registered shareholders throughout the formal portion of the meeting. Once all motions are made, we will provide a final call for votes and check that there are no questions related to any of the three resolutions that were outlined in the information circular: namely, fixing the size of the board, electing trustees and appointing Melcor's auditors. Our scrutineers also provided a report of shareholder attendance at this meeting. We have at least 57 shareholders and proxy holders representing a total of 24,364,164 shares, or 79.79% of Melcor's outstanding shares.
This is quick, sufficient to meet the quorum. I now declare this meeting regularly called and properly constituted to conduct business. I now request a motion to dispense with the reading of the minutes of Melcor's last annual general meeting of shareholders held on April 26, 2023.
I move that the reading of the minutes of the last annual general meeting of shareholders be dispensed with and that the minutes be approved as written.
I second the motion.
Thank you, Robin and Naomi. The next item of business is the presentation of the financial statements for the period ending December thirty-first, 2023, and the related auditor report. When you received the notice of this meeting, you also received instructions for accessing Melcor's annual report online or requesting that a printed copy be sent to you. This information is also available on our website at melcor.ca or sedarplus.ca. It will, it will be mailed to anybody who requests it. As you've had ample opportunity to review this material, I would request a motion dispensing with the reading of the financial statements and auditor's report.
I move that the reading of the financial statements for the period ending December 31, 2023, and the auditor's report be dispensed with.
I second the motion.
Thank you again, Naomi and Robin. Next item of business is to fix the number of directors to be elected at this meeting.
I move that eight directors be elected at this meeting.
I second the motion.
Thank you. Next, we have the election of the directors. All directors elected today will hold office until the next annual general meeting, unless his or her office is earlier vacated. The eight nominees, as listed in the information circular, are proposed for election. They are Douglas Goss, Andrew Melton, Kathleen Melton, Timothy Melton, Bruce Pennock, Janet Riopel, Catherine Roozen , and Ralph Young. We have received sufficient proxies to individually elect these nominees and will not be seeking nominations from the floor.
I move that Douglas Goss, Andrew Melton, Kathleen Melton, Timothy Melton, Bruce Pennock, Janet Riopel, Catherine Roozen , and Ralph Young be individually elected to serve as directors of Melcor.
I second the motion.
Thank you again, ladies. We're now on to the final item of business, after which we'll check for questions related to the motions prior to closing the poll. The final item of business is to appoint external auditors and to authorize the directors to set their remuneration. I ask for a resolution in this regard.
I move that PricewaterhouseCoopers be appointed as Melcor's auditors until the next annual meeting or until a successor is appointed, at remuneration to be determined by Melcor's Board of Directors.
I second the motion.
Thank you. The polls will close in 60 seconds, so if you are voting live today, please vote on all matters now. While we give everyone a final moment to complete their vote, I'll take a moment to check with Robin to see if we've received any questions from the audience with respect to any of these motions.
Thank you, Tim. At this point, we do not have any questions on any of the motions.
Thank you, Robin. Well, this concludes the formal business of the annual general meeting, as described in the notice of meeting. I hereby instruct Odyssey Trust Company to close the polls in 30 seconds. As indicated, all motions presented today have been passed. May I have a motion to adjourn?
I move that the meeting be terminated.
I second the motion.
Thank you. I therefore declare this formal portion of the meeting to be terminated. Prior to turning over the meeting to Naomi, for sort of review on operations for the year 2023, I'd like to just personally, acknowledge and thank our board of directors for their continued guidance and counsel and good stewardship of the company. I would also like to thank Melcor staff and leadership team for continuing to deliver satisfactory results for Melcor. Thank you all very much for your dedication and your effort. And finally, I'd like to thank our shareholders for their ongoing support and commitment, and I will now turn the meeting over to Naomi for a management presentation and any, questions that might come forward. Thank you, everybody.
Thanks, Tim. And while many of you know Tim and myself, I'd like to take a quick moment to introduce you to the rest of our team.... These are the people who are responsible for all of the development projects we build, the investment properties we run, and the communities we create. They really are a tremendously talented group of individuals that I'm proud to have as colleagues and friends. Our senior leadership team is comprised of Randy Ferguson, Senior Vice President of Properties, Susan Keating, Vice President of Land for the Edmonton region, Leah Mazzotta , Vice President of Properties, Graham Melton, Vice President of Land for the Calgary region, Sinéad O’Meara, Vice President of Finance, and Robin Sellick, Vice President of Accounting and Corporate Services.
While this picture is no longer on this slide, I'd also like to recognize Guy Pelletier, our Vice President of Land for the Red Deer region, who retired in May of this year after 27 years with the company. Guy, we thank you for all of your contributions, and hope you are enjoying your first few months of retirement. 2023 was a strong year for the company, which feels extra special as we also celebrated our 100th year of operations. We achieved a revenue of CAD 350 million, with a 45% gross margin. Net income is shown here at CAD 63 million, but we prefer to focus on funds from operations, or FFO, which was a healthy CAD 84.5 million, up from CAD 60.9 million last year.
We also paid out dividends to shareholders of CAD 0.64 per share, and continued our NCIB program, repurchasing and canceling 712,000 shares for CAD 8.1 million. Because of all the non-cash accounting items included in net income, management focuses on funds from operations, or FFO, to review performance of the company. FFO in 2023 was CAD 84.5 million, just shy of the record CAD 85.5 million set back in 2014. Looking at some of our key operating metrics, we sold 1,149 lots in Canada and 234 in the U.S. We completed construction on 22,000 sq ft of retail buildings, and our committed occupancy is 89% across our portfolio. Over 123,000 rounds were played at our golf courses.
To minimize the impact of higher interest rates, we had a strong focus on debt reduction in 2023, and we reduced our general debt by CAD 70 million in the year. At December 31, 2023, Melcor had CAD 2.1 billion in assets. This includes 9,815 acres of raw land, 607 fully developed single-family lots, and 163 acres of developed land ready for multifamily or commercial sale. Our properties and REIT division own and manage 4.77 million sq ft of commercial property and 466 residential units. Finally, we have four golf courses, all of which add significant amenity value to our surrounding Melcor communities. You might have noticed that we reorganized and renamed our operating segments at the end of the year.
Developing new commercial properties has become increasingly expensive, making it difficult to achieve desired financial returns without significant risk. As such, we are more selective and cautious with respect to new development. As a result of this shift into streamlined operations, we merged our former investment properties and property development divisions into a single, more efficient properties division. This reorganization has brought several benefits, including process synergies, streamlined decision-making, and refocusing our development team's expertise towards opportunities within our existing assets. So there you have our new operating division structure: land, properties in the REIT, and golf. Let's break down how each division impacts our overall performance. Golf division revenue is limited by the number of tee times per day and golf days per season. When the weather is favorable, the golf courses do well.
Our properties and REIT division generates steady rental income, provided we are able to maintain consistent occupancy and base rents. Because of this stability, we can rely on a predictable revenue stream from our properties without much fluctuation. Changes over time reflect growth in our portfolio over the same period. GLA grew by 1.5 million sq ft from 2014 to 2023 as a result of new commercial properties built and third-party acquisitions. Unlike the other divisions, the land division can be dynamic. The revenue and margins from this division can vary significantly based on factors like market demand, timing of sales, and development cycles. Because of this variability, the land division has the potential to significantly boost our overall results. So while properties, REIT, and golf provide a stable foundation of revenue and margin, it's our land division that acts as the swing factor.
Land was that swing factor in 2023, with the third highest revenue year since the record set in 2014. We sold a combined 1,383 lots in Canada and the U.S., compared to just over 1,000 lots in the prior year when we had no sales in the U.S. In 2023, momentum in our land division swung south to the Calgary region. Following more than a decade of Edmonton being our largest contributor, Calgary lot sales surpassed Edmonton for the first time. Over the past three years, the Calgary region has launched five new communities, including two in 2023, leading to record revenue contributions from the region. We anticipate this trend continuing as these communities build out and in-migration to Calgary remains strong. As mentioned, our properties division merged the former property development and investment properties division into one unified team.
This team manages all of our commercial properties, including those owned by the REIT... The properties owned by Melcor directly generated CAD 43 million in revenue and achieved a margin of 58%. The development arm completed two retail buildings of just over 22,000 sq ft, and has a further five buildings under construction at year-end, representing over 100,000 sq ft. The REIT also continued to produce stable results and contributed revenue of CAD 74 million, with a gross margin of 58%. Occupancy remains steady at 88% across the portfolio. Last but not least, our golf courses had another solid year, posting record revenue. The weather was mostly cooperative, and the only significant factor in rounds played last year was the impact of the BC wildfires and related smoke.
Thankfully, the cooler spring and higher precipitation this year have led to a relatively quiet fire season for both Alberta and BC so far. Interestingly, the Oilers playoff run had a negative effect on golf in 2024. There have been a lot of empty tee sheets on game days. So while we are all very sad here in Edmonton about the Oilers loss last night, we are very much looking forward to welcoming all the golfers back out to the courses. Melcor remains committed to the conservative financial strategies that have contributed to the longevity for the past 100 years. Our land division remains focused on harvesting current inventory. New acquisitions, if any, would be strategic parcels, especially adjacent to existing land holdings. Our properties and REIT division will focus on optimizing our current portfolio and selling some non-core assets.
Our golf division will continue to attract golfers through a fantastic player experience, and provides an inviting neighborhood food and beverage experience to our communities. The ability to evolve and adapt has been a cornerstone of Melcor's success for 100 years. Along with our disciplined and conservative approach to debt and strong balance sheet, we believe that this adaptability will enable Melcor to continue to thrive. The achievement of this past year were made possible by the unwavering commitment and hard work of the entire Melcor team. I am incredibly proud of our collective efforts. As COO and CFO, I have the privilege of witnessing firsthand the dedication and expertise that drive our company forward, and I am deeply grateful to the team's contribution to our continued success. This concludes our management presentation. We'd be happy now to take any questions.
As a reminder, you click on the messaging icon at the top of the left-hand Lumi window to enter your question. Note that questions may be moderated for clarity and brevity. Robin, do we have any questions?
Thanks, Naomi. The first question I have: Is there a plan to divest low-performing assets to enhance ROC and return capital to shareholders?
As the REIT is one of the operating divisions of Melcor, if you listen to the REIT AGM earlier, we do have a few assets listed for sale, in our REIT portfolio. Currently, we do not have any plans to divest of any non-REIT assets.
The second question: Has Melcor Developments guaranteed any debt at Melcor REIT?
We do have a few mortgages when the REIT was created that went over to the REIT, still with a guarantee from Melcor. We only have, I believe, one of those remaining, two of those remaining. Other than that, no, there are no guarantees.
The next question I have: Are there any plans and goals to increase Melcor's profitability and return on equity?
Well, I would, I would like to say that that's always the goal of all companies, is to increase profitability and return on equity, so that's definitely a focus of ours now and always, has been and always will be. Absolutely, I think it's something that we, as a board, speak to, and particularly, as mentioned, looking to, like, our funds from operations. I think cash has been a focus for the company, and really looking to pay down debt. And I think that's something that we were proud of in the past year and continue to do in 2024.
Thanks, Naomi. Next question: How are lot and land sales doing in the second quarter, and how is the balance of the year looking?
The 2024 year is looking very similar to sort of 2023. Their lot sales are always quite lumpy, so it's hard to really believe anything out of first and second quarter results. We expect 2024 to be another successful year.
We had a question from an investor asking if the AGM webcast will be made available for viewing. So for everybody's benefit, the AGM reporting will be available in the website in the coming days. So you can keep an eye on both. This is for both Melcor Developments and Melcor REIT, if anybody was on that call earlier today. That concludes the messages that we have currently published. As there are no new additional questions from the audience, we will wrap up the meeting. So I would like to thank everybody for attending our 2024 annual general meeting for Melcor Developments. The meeting is now concluded. We wish you all a fantastic summer!