The year to 31 December 2020 has turned out to be a financially difficult one for most companies. RDC Properties Limited, a BSE-listed real estate company, has not been spared.
In his address to the shareholders during presentation of the company’s financial results, RDC Chairman, Guido Giachetti, admitted that the year, which was characterised by the COVID-19 pandemic, had been an unprecedented one which has not only affected the real estate sector but brought a lot of uncertainties on the regional economy.
“(The year) 2020 was an unprecedented year for all of us,” he said. “It has changed our lives and the long term effect on the regional economies and on the real estate sector remains unclear. The coronavirus pandemic (COVID-19) had taken the world by surprise, disrupting global markets and shaking the fundamentals of our world economic models.”
But RDC Properties managed to remain calm and maintained a healthy position at group level during the turbulence, hence the confidence of stakeholders was not affected, Giachetti said.
Major impacts on the Group were felt on the company’s tourism and recreational portfolio due to travel restrictions being imposed by different counties. The impact has been mitigated differently by the six countries in which the company is active. For example, South Africa has been less affected than Botswana. Exposure to small retail and commercial units was limited but the impact was heavy mainly on hospitality.
Rentals from industrial and residential properties remained relatively strong due to strong demand but the retail sector was under a lot of pressure. To support business to get through the pandemic, some relief in the form of rental deferrals and conversion of rentals into short term debt arrangements were done on a case-by-case basis.
The year saw the company registering a decline of 22.5 percent in its profit from operations, compared to the 2019 figures. This was mainly attributed to the fall in rental revenue which went down by 14 percent from P152.5 million recorded in 2019, largely as a result of the impact of COVID -19. However, investment and the property portfolio recorded a 13.6 percent increase from the previous year’s 2.0 billion. This was mainly attributed to the capital appreciation of a portfolio which was independently revalued.
Shareholders’ funds as at 31 December 2020 amounted to P1.16 billion, a decrease of 1 percent from the previous year, resulting in a Net Assets Valued per linked unit of P3.27. Cash flows have been tested and the Group has demonstrated its strong balance sheet and managed to retain its strength strategy.
The company’s long term objectives remain focused on accumulation and development of unique properties, diversification by regional portfolios balancing portfolio growth and creative acquisitions. The company has also committed to prioritizing the health and safety of its staff and tenants in the face of the pandemic and working with communities to mitigate the impact of COVID-19.
The Board Chairman revealed that the group was considering various cross-border acquisitions aimed at enhancing existing portfolios as a continuation of the company’s strategy of portfolio and geographic diversification.
This article was prepared by Data Collection & Analysis, a business research firm. Feedback or inquiries can be relayed to 76 740 658.
