Due primarily to losses by Magna Entertainment racetracks, MI Developments, the property arm of Canadian auto-parts empire Magna International, reported lower first-quarter profit May 7.
MID, which owns 59% equity interest in MEC, reported its consolidated profit fell to $6.6 million, or 14 cents a share, from $23.3-million, or 48 cents a share, in the same quarter last year. MID's real estate unit reported funds from operations of $43.9 million, or 94 cents a share, for the quarter ended March 31, up from $34.2-million, or 71 cents per share, a year ago.
Consolidated revenue during the quarter was $276.7 million from $294.1 million.
During MEC’s annual meeting in Ontario May 6, the company reported a first-quarter loss of $46.5 million, or 40 cents per share, compared with a $2 million profit, or 2 cents share, during the first quarter of 2007, ending March 31. Quarterly revenue fell 9.1% to $231 million, down from $254 million.
The first quarter historically is profitable for MEC because live racing is conducted during that period at its two flagship tracks--Florida’s Gulfstream Park and California’s Santa Anita Park. Problems at both tracks were cited by company officials for the staggering loss.
During a May 7 conference call, MID reported a special committee reviewing a reorganization plan will report and call a special meeting on or before May 30. The plan would see Magna Entertainment shares bought for $15.50 cash and stock of a restructured MI Developments. MID would sell its 59% equity interest in MEC to an unnamed entity for $25 million, but would transfer $150 million in cash and loans to a limited partnership controlled by Stronach.
