PROPERTY developer, WestProp Holdings Limited’s profit after tax fell sharply by 83% to US$4,37 million in the half year ended June 30, 2024, owing to no fair value adjustments on its investment properties.
The drop is from a profit after tax of US$25,14 million earned in the comparative 2023 period.
In a statement accompanying the half-year results, the chairman Michael Louis said revenue increased by 77% to US$14 234 363 during the period from a 2023 comparative of US$8 044 798.
“Our prime real estate development, Pokugara Properties (residential estate town houses) performed strongly, surpassing other developments and contributing (46%) of revenue through the sale of townhouses,” Louis said.
“Pomona City ‘A smart City within a City’ which is almost sold out, contributed (43%) of revenue through the sale of vacant stands.
“Seatrite Properties, which sells apartment residential units in a multi-unit condominium termed Millennium Heights blocks contributed (11%) of total revenue.
“The group’s major investment in freehold property, plant and equipment, and insourcing of aluminum and glass products (which were previously major cost drivers when outsourced), contributed to the growth of the gross profit margin.”
He said these were in addition to efficient management, better project planning and execution, and lower construction costs.
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“The group recorded a net profit after tax of US$4 377 209 with a notable net profit margin of 31%,” Louis said.
“This is a sharp drop of 471% comparing with 2023, which had a net profit margin of 313%, which was highly skewed upwards because of fair value gains recognised on the Group’s investment property portfolio.”
Last year, the firm launched its Pomona City development and the Millennium Heights residential developments.
The firm’s other developments include Pokugara Residential Estate, The Mall of Zimbabwe, Millennium Heights Office Park, and the Hills Luxury Golf Estate.
“Operating expenses for the half year decreased by 0,6% from US$2 591 746 to US$2 577 049 from the previous year, this is a significant decrease when measured in relative terms where the operating expenditure is 18% of revenue in 2024 compared to 32% of revenue in 2023,” Louis said.
“The high operating costs in 2023 were a result of the listing requirement, which was once-off and did not recur in 2024.”
Liquidity, however, improved by 13% with the group having cash and cash equivalents of US$3,01 million for the period under review from a 2023 comparative of US$2,65 million.
“The group closed the half year with a healthy current ratio of 3,67 times indicating its ability to cover short-term obligations,” Louis continued.
Total assets for the group were recorded at US$184,85 million for the period under review, from US$178,67 million recorded as of the end of last year.
The increase was largely due to trade and other receivables rising by US$7,07 million.
The trade and other receivables refer to the amounts owed to the firm by customers and other entities because of business transactions as WestProp sold properties during the period.
“Looking ahead, the group remains cautiously optimistic and continues to work towards its target of putting a billion bricks in the ground by 2050 and is still within this target,” Louis said.
“We will continue to persevere, perform, and deliver our commitment to growing shareholder value, sharing our future success with all stakeholders.”
The group is in the final stages of negotiations with its South African partners for its long-awaited "The Mall of Zimbabwe".
