Zimre Property overturns loss position

Enacy Mapakame Business Reporter

Property concern, Zimre Property Investments Limited (ZPI), overturned a loss position to register $116 million profit for the half year to June 30, 2019, from a loss position of $0,2 million reported in the same period last year.

According to ZPI, the currency reforms introduced during the half year resulted in investment property values increasing substantially in local currency.

As a result, there was a fair value adjustment of $121,80 million that gave rise to the profit jump.

Basic and diluted earnings per share amounted to 6,79 cents from a basic loss per share of 0,01 cents.

Total revenue for the year grew by 124 percent to $3,37 million from the $1,51 million achieved in the prior year comparable period.

At $1,75 million, projects income for the period was 323 percent above the $0,41 million achieved in the corresponding period in the prior year.

During the period under review, Government implemented currency reforms such as floating of the exchange rate, introduction of local currency and removal of the multi-currency basket.

As a result of the transition from multi-currency to local Zimbabwean dollar, ZPI recorded exchange gains of $3,31 million during the half year.

“The translation of investment property values, which were valued in United States of America dollars at December 31, 2018, to Zimbabwe dollars resulted in a fair value adjustment of $121,80 million for the half year,” said the property firm in a statement accompanying financial results.

The period under review saw the property portfolio performing well as rentals went up 47 percent to $1,51 million  from $1,03 million during the comparative prior year period.

The recently completed Sawanga Shopping Mall in Victoria Falls, contributed significantly to rental income. Sawanga Mall partially opened in April 2019 and improved inflows from the Bulawayo student accommodation facility that has increased occupancy levels to above 65 percent.

Collection for the period averaged 124 percent and this saw a reduction in overall portfolio debtors by 74 percent to $0,9 million from $1,7 million by close of the period.

Average vacancy rates also marginally declined from 28 percent to 27 percent over the comparative periods with Gweru industrial, Bulawayo CBD offices and Harare Kopje area offices recording the highest void rates.

Total administration costs went up 68 percent to $1,81 million and ZPI initiated cost control measures throughout the reporting period, which saw cost escalations limited to 41 percent. At $181 million, total assets were 235 percent above same period last year.

While ZPI remains positive about the future of real estate in Zimbabwe, the property sector as a whole is expected to remain subdued on high costs and weak demand.

“We expect a turbulent time that will have some negative impact on rentals and property returns in this period as the economy adjusts to the new currency changes and other statutory interventions,” said ZPI.

The company did not declare a dividend to preserve resources for the completion of the outstanding works at the Sawanga Shopping Mall project.