In compliance with the requirements of the Securities Act 41 of 2016 and the Lusaka Securities Exchange Listings Rules(the “LuSE Listings Rules” or the “Rules), Real Estate Investments Zambia PLC (REIZ) announces the results of the Company and its subsidiaries (collectively referred to as the Group) for the year ended 31 December 2018. These results are derived from the Group’s audited financial statements which were approved by the Directors at a Board Meeting held on 1 March 2019.
The Group reported a profit after tax for 2018 of ZMW2.8 million compared to ZMW25.0 million for 2017. Revenue declined in 2018 by 22.4% to ZMW50.6 million from ZMW65.2 million in 2017 while profit from operations increased to K54.1 million in 2018 from K42.7 million in 2017.
The positive impact on the operating results came from:
1. Continued cost-control and rightsizing measures which saw operating and administrative costs reducing by 5.4% notwithstanding inflation driven cost increases year on year.
2. Depreciation of the Kwacha during the year which accounted for approximately 10.8% favorable impact on rental revenue arising from US Dollars based operating leases.
3. Investment properties appreciated in Kwacha value terms due to approximately 19% devaluation of Kwacha from K10.01/$ at end of 2017 to K11.89/$ at end of 2018, leading to a net change in fair value of ZMW26.3m in 2018 compared to ZMW2.2m in 2017. In USD terms, the fair value of the investment property portfolio declined by 17% due to vacancies and falling market rentals. The fair value of investment property was determined as at 31 December 2018 by external independent and professional experts in property valuation, Knight Frank Zambia Limited, who possess appropriate recognized professional qualifications and have requisite experience in the location and category of the properties valued.
The Directors propose a final dividend of K0.13/share for shareholder approval at the Annual General Meeting that will be held at Southern Sun Ridgeway Hotel on Wednesday 27th March 2019.
The property industry is expected to remain challenging with most of the market forces that characterized 2018 expected to continue to prevail in 2019 particularly with regard to occupancy and rental rates which are expected to continue to face downward pressure in 2019…
REIZ 2018 abridged financial results