REIZ reports profit after tax of K67.7 million for 2022, upstaging K324.5 million loss in 2021

Real Estate Investments Zambia PLC (REIZ)has reported a profit after tax of K67.7 million for 2022 compared with a loss of K324.5 million in 2021.

The Group and Company earned a profit mainly on account of increase in fair values of the investment properties and reduction in finance costs.

This is according to the abridged financial statement for the year ended December 31,2022 posted on the Lusaka Securities Exchange (LuSE).

It stated that the investment properties values increased due to improved group occupancy rates which stood at 76.2 percent as at December 31, 2022, an increase of 10 percent from 66 percent as at December 31, 2021.

The report further stated that the biggest improvement in occupancy rates was at Arcades Shopping Mall from 60 percent in 2021 to 78.7 percent in 2022.

“The deprecation of the Zambian Kwacha against the United States (U.S) Dollars by 8.5 percent during the financial year 2022 also contributed to the increase in fair values of investment properties which are valued in dollars.

“The stability in the exchange rate especially in the first 10 months of the financial year reduced the finance cost by 13 percent compared to prior year and this led to the Group and Company making a profit after finance costs,” it stated.

It indicated that revenue in Zambian Kwacha terms was five percent below prior year purely due to the rental billing average exchange rate of K16.98 to a dollar being lower in 2022 as compared to K17.98 prior year.

“In reality the revenue in United States Dollar terms was two percent higher in 2022 over the previous year.

“The increase in revenue in dollar terms was due to improved occupancy at Arcades Shopping Mall and Counting House, and no discounts or rental concessions being granted to tenants during the year,” it indicated.

The report added that on the fair value of the Group’s investment property portfolio increased from K757million in 2021, to K837 million in 2022 mainly on account of the increased occupancy levels and the depreciation of the Zambian Kwacha against the dollar by 8.5 percent during the financial year from K16.66 to dollar as at December 31,2021 to K18.08 the previous year.

On the net cash, the report indicated that Group recorded an increase in net cash generated from operating activities from K11 million in the prior year to K24 million in 2022.

This represents an increase of 127 percent and is mainly attributable to lower finance and administration costs in 2022 as compared to 2021.

The Group experienced an increase in cash and cash equivalents during the year to K12 million in 2022 from K1 million in 2021.

It stated that the increase was due to the successful rights issue which resulted in the Group and company issuing new shares and raising K156,505,000 with most of the funds being used to partly pay off the corporate bonds.

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