FMP posts strong revenue performance despite tough business conditions

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  • Revenue was up 45%
  • Mainly driven by rental income
  • The company however recorded a ZW$1.5 billion loss due to fair value adjustments

Harare – Real estate holding company, First Mutual Property (FMP) has recorded a 45% improvement in revenue for the half-year ended 30 June 2021 despite the period being characterised by intense lockdowns which consequently subdued demand for space.

In monetary terms, the company’s revenue was ZW$204.23 million in the period under review compared to ZW$141.17 million recorded in the same period last year this consequently led to the group’s Net Property Income after administration expenses growing by 11% to ZW$43.14 million from ZW$38.81 million in the first half of 2020.

The company says this performance is largely hinged on rental income after having to readjust rent prices to keep ahead of inflation as well as a 1% improvement in occupancy to 89.48% in the period.

“In historical terms, revenue grew by 369% ahead of inflation at 106%, driven by the repricing of rentals during the period, with the focus on indexing rentals to foreign currency in line with the provisions of Statutory Instrument 85 of 2020,” said FMP board chairman, Elisha Moyo in a statement accompanying the company’s results.

The company, however, recorded a ZW$1.57-billion-dollar loss owing to fair value adjustments.

“An independent property valuation conducted by Knight Frank Zimbabwe as at 30 June 2021 valued the property portfolio at ZWL 9.767 billion, being a 14% decrease in value in inflation-adjusted terms from 31 December 2021, and 4% appreciation in historical terms on a market value basis,” the board chairman said.

Looking forward, the company is worried that the general economy will remain subdued due to the slow rollout of the COVID-19 vaccine which will consequently slow the recovery in demand for space.

Meanwhile, the company says it is at the pre-construction stage of its Arundel Office Park extension and has completed the design development of the architectural plans and is now undertaking an environmental impact study, before seeking approval from authorities and commencing the tendering process.

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