Sri Lanka Overseas Realty March profits up on apartment sales
ECONOMYNEXT – Profits at Sri Lanka’s Overseas Realty, a real estate company which has built a war chest of retained earnings nearly the size of its property portfolio, grew 17 percent from a year earlier to 1.4 billion rupees in the March 2019 quarter on growing apartment sales.
The company which owns Colombo’s iconic World Trade Centre and Havelock City, a condominium and commercial real estate project, reported earnings of 1.12 rupees a share for the quarter, according to interim financial results filed with the Colombo’s stock exchange.
The stock was trading 50 cents higher at 15 rupees.
Revenue in the quarter grew 67 percent from a year earlier to 2.3 billion rupees with apartment sales surging 119 percent to 1.63 billion rupees, mainly due to recognition of revenue from Phase 4 of the Havelock City Commercial Development project, the company said.
Havelock City when completed in April 2021 will comprise a 50-storeyed office tower, shopping mall and condominiums.
Phase 4 of the project will add 340 units and will be completed by October 2022 with pre-leasing of retail space already begun, the company said.
Phase 3 consisting of 304 units will be completed by September 2019.
Rental income was up 9 percent to 605 million rupees. The company has 185 condominium units including at World Trade Centre Colomb from which it earns rental income.
Market rates for rent per square foot was between 250-375 rupees in 2018, easing up to 260-385 rupees in 2019 and is expected to increase 5 percent annually over the next 3-10 years, the company said.
Cost of apartment sales grew 141 percent to 951.2 million rupees while direct operating expenses were steady at 157 million rupees, leading to gross profits growing 45 percent to 1.2 billion rupees.
Administration expenses had grown 15 percent to 117.3 million rupees and net finance income declined 27 percent to 72.8 million rupees.
The company reported a forex loss of 26 million rupees compared to a gain of 72.5 million rupees a year earlier.
It also booked a gain of 275.8 million rupees on valuation of property, down 5 percent from a year ago.
The company’s investment properties were valued at 27.3 billion rupees at end March 2019, gaining a marginal 1 percent from end December 2018.
Total assets fell 2 percent over the three-month period to 48.7 billion rupees but Overseas Realty’s war chest of retained earnings grew 7 percent to 22.6 billion rupees.
Loans had grown 7 percent to 3.1 billion rupees. (COLOMBO, 10 April 2019)