REIZ forecasts 186% lower earnings per share at half year 2019
Real Estate, Real Estate investments Zambia (REIZ)

Property group Real Estate Investments Zambia Plc anticipates to report weaker earnings at half-year 2019 following unrealized exchange losses among other reasons, according to a statement from the company.

“In accordance with the Lusaka Securities Exchange Limited Listings Requirements, the Board of Directors advises the Shareholders of Real Estate Investments Zambia PLC that for the half-year ended 30 June 2019, the basic earnings per share is expected to be 186% lower than the basic earnings per share for the half-year ended 30 June 2018”, read a statement issued on SENS on 11th September 2019.

The company which has a substantial portfolio of prime real estate in some of the country’s upmarket locations has faced immense competition as well as a harsh macro environment that has seen exchange rate volatility and above Central Bank targeted inflation. Competition has signaled saturation in the market space that REIZ plays in. Coupled with weaker economic fundamentals, off taking of prime property has been demising in recent months leading to lower occupancy.

REIZ management attributes its weaker performance at half-year due to

  • “unrealized exchange losses amounting to ZMW 15.4 million on revaluation of foreign currency-denominated liabilities due to depreciation of the ZMW against the USD, compared to an exchange gain of ZMW1.9 million recorded in 2018”,
  • “higher finance costs following full drawdown of loan facilities that funded the Arcades shopping mall redevelopment and refurbishment of cinemas”
  • “a reduction in fair value of the investment property portfolio by ZMW 1.7 million driven by falling market rental rates during the period compared to a revaluation gain of ZMW 1.9 million for the same period in 2018”.

With the full results of the half-year (ended 30 June 2019) performance expected to be published on 12 September 2019, shareholders of the REIZ securities have been advised to trade with the instruments with caution.

 

At the time of writing, the REIZ security traded at K5.80 per share on the LuSE. However, according to information sourced from Financial analytics Zambia, traders in the first week of September had offered K6.00 for the security. Investors remain bullish on the security as its high Price to Earnings ratio indicates high levels of optimism albeit a premium-priced security.

 

This is not the half-year that REIZ would have hoped for. In their 2018 annual report, the group took a haircut on rental remissions granted to the Arcades tenants for the months of January and February 2018 during the redevelopment of the mall, portfolio vacancies and impairment of receivables.

Sharing is caring!

(Visited 119 times, 1 visits today)
The information contained on this website is for general information purposes only. While we endeavour to keep the information as accurate as possible, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or subject companies or matters contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
 right-arrow   right-arrow