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Real estate sector posts good tidings

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Listed firms from the real estate sector showed good fortunes in the half year ended June 30 2021 despite the Covid pandemic affecting most sectors of the economy.

In its statement co-signed by chairperson Edith Jiya and managing director Damien Kafoteka, Mpico announced that its group profit-after-tax grew to K2.8 billion in the year under review, up from K2.5 billion realised during a similar period last year.

The group generated total income of K6.4 billion, up from K5.4 billion earned during the half year ended June 30 2020.

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Mpico attributes the performance to interest charged on rental arrears, one-off accounting costs on financial instruments and relatively more property expenses being incurred in the current year.

Government debt also dropped to K2.8 billion as of June 30 2021 from K8.7 billion in December 2020, which follows the issuance of Promissory Notes by the government amounting to K7 billion on June 17 2021 as part-settlement of the rental arrears.

It, however, notes that the pandemic will continue having a bearing on its business.

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“The recurring effect of the Covid pandemic will likely have an adverse impact on the economy including the real estate industry. The board is, however, continuously working on minimising these impacts in order to preserve value for shareholders,” the statement reads.

This follows the recent statement that Icon Properties released announcing a K3.1 billion profit, up from K2.1 billion earned during the half year ended June 30 2021.

The Covid pandemic shook sectors of the economy such as tourism and transportation.

Notably, the banking sector also saw many of its listed banks earning profits in the period under review.

Profit-after-tax for another property holding company, Icon Properties, for the six-month period ended June 30 2021 increased by 45.5 percent to K3.1 billion from K2.1 billion.

The company attributes the performance to the increase in property revaluation gains.

According to a published financial statement, co-signed by Icon Properties directors Dasford Kamkwamba and Sangwani Hara, total expenses for the group also increased to K1.15 billion from K1 billion as a result of inflationary pressures, spending on measures to prevent the spread of Covid and other property management-related costs.

It further indicates that despite the gains in profit, the Covid pandemic continues to have an impact on the company’s performance.

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