Harare – Zimbabwe Stock Exchange-listed Zimre Property Investments Limited’s total revenue for the half year ended June 30, 2018 declined by 41 percent to $1.5 million compared to $2.6 million achieved in the first half of 2017.
In a statement accompanying the Company’s financial results, Chairman Jean Maguranyanga said the disposal of Zimre Centre Harare at the end of 2017 as part of a wider portfolio restructuring programme saw rental income reducing by 25 percent to US$1.1 million from US$1.4 million recorded during the same period last year.
“In order to preserve value, fewer stands were sold during the period under review. As a result, sales amounted to $0.4 million, down from $1.1 million achieved in the first half of 2017.
“Total administration costs marginally increased by 5% to $1.1 million from $1.0 million in the prior period.”
She said due to the deteriorating operating environment, there was a further impairment of trade receivables of US$0.2 million at the half year.
“This, together with value preservation strategies that were deployed, which reduced revenues, resulted in a loss for the period of $0.2 million compared to a profit of $0.6 million for the same period last year.
“The completion of the Merwede project in Harare and the issuance of a certificate of compliance should see significant revenue inflows in the last quarter of 2018.”
Maguranyanga added that pursuant to the Company’s portfolio restructuring and diversification strategy, the Board authorised the disposal of Zimre Centre in Harare to finance the construction of the Sawanga Shopping Mall in Victoria Falls and the closure and conversion of Nicoz House building in Bulawayo from an office building to student accommodation.
She said the two buildings together contributed more than a third of rental income. A significant dip in the business income was therefore unavoidable in the short-term and full recovery by the end of the first quarter of 2019 is expected as the projects remain on schedule and tenant interest is reasonable.
“Rental income, on budget at $1.1 million, declined by 25 percent compared to the same period last year, in line with the strategic shift.
“Average collections for the period to 30 June 2018 were 97 percent compared to 107 percent for the year ended 31 December 2017, whilst debtors marginally declined by 11 percent over the same period.”
“Average void rate for the portfolio went up from 26 percent to 30 percent over the period. This was largely due to conclusion of eviction processes initiated earlier on in the year and some voluntary surrenders of space”
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