RDC Properties delivers yet another solid financial performance

• Revenue and profit up 258% and 163% respectively
• Investment and property portfolio increased to P5.9bn
• Reports positive signs for leisure travel in Botswana in the year to come

In audited financial results for the financial year ended 31 December 2022, the property development and investment company says it is delivering on the integration after its acquisition of the Tower portfolio on 28 December 2021, converting acquisition gains into tangible increases in revenue and profits and creating sustainable shareholder value.

Says Executive Chairman of the Board, Guido Giachetti, in the results:  “The acquisition diversified and strengthened our portfolio in terms of sector and location, and we have confirmed the solidity of the portfolio post-acquisition. “The portfolio has grown to P5.9 billion – an increase of P86.2 million despite the sale of P110 million of less strategic assets, including the Roots Tower Property in Maun.”

Revenue increased by 258 percent to P525.2 million (2021:P146.6 million) with the solidity of the portfolio once again demonstrated by the profit from operations before fair value adjustments and increasing by 337 percent to P274.1 million (2021: P62.7 million). Profit from operations increased by 257 percent to P412.4 million (2021: P115, 4 million) while profit attributable to shareholders (excluding the prior year’s bargain purchase gain of P577.3 million) increased by 164 percent to P137.3 million (2021: P51, 9 million).

“The increase in profit attributable to shareholders is due to revenue growth, positive fair value gains on investment properties, and positive fair value gains on interest rate swaps,” says Giachetti. “The Group has to an extent been protected from the increasing interest rate environment, as 56 percent of the debt is hedged or fixed.”

As of 31 December 2022, the Group has reduced its Loan to Value (LTV) by 2 percent from 46 percent to 45 percent. As of 28 December 2021, the Group did not utilise the full Investec facility provided for the acquisition of Tower Property Fund – only R306 million was initially disbursed. In March 2022, the balance of R94 million was deployed.

Having disbursed P49.1 million for improvements to the portfolio, P52.7 million for loan capital repayments, and spending P18.4 million on additional interest due to prime/index rate increases across all jurisdictions, Giachetti says RDC Properties is pleased with the LTV reduction of 1 percent. “Confidence in our strategy and the management team is once more confirmed by the support received by our capital providers – both our bondholders and commercial bankers,” he notes.

“I wish to thank them for their proactive engagement with our teams. Management intends to further reduce gearing over the medium-term and focus on cash flow.” Net Asset Value (NAV) per linked unit has grown by 2 percent to P3.29 per share (2021: P3.23) and Giachetti emphasised that this is supported by conservative valuations. “We are pleased to confirm that the Group is presently receiving and considering solid offers for properties in the portfolio,” Giachetti says.

BOTSWANA PORTFOLIO

Meanwhile, contributing 17 percent of rental revenue despite representing 25 percent of the portfolio by value, the Botswana portfolio has remained relatively stable throughout the year, ending with a vacancy of 6.7 percent. The Group says its hospitality assets in the country, which have underperformed in 2022, are experiencing solid forward bookings for 2023, with leisure travel forecast to reach pre-pandemic occupancies and rates, which is a positive sign for this portfolio in the year to come.