Centum Real Estate net profit drops 72pc to Sh650m

Centum Real Estate managing director Samuel Kariuki. PHOTO | SALATON NJAU

By ELIZABETH KIVUVA
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Centum Real Estate has posted 71.7 percent drop in net profit for the year ended March 31, 2021 owing to reduced demand of the residential units on the fallout of the coronavirus pandemic.

The property developer, a subsidiary of listed Centum Investment Company 

, reported Sh650.4 million net profit from Sh2.29 billion in a similar period last year.

The financials are the first consolidated results for Centum's real estate investments – Vipingo Development Limited, Centum Development Kenya, Uhuru Heights Limited and Pearl Marina Estates in Uganda, which were put under the holding company in September last year.

The real estate firm reported a 34 percent decline in the number of total units sold in the year compared to the previous year.

“The results for the year were achieved against the background of economic disruptions arising from the Covid-19 pandemic and the resultant responses from the government of Kenya and Uganda,” the firm said.

“The effect of these measures was an initial slowdown in residential unit sales in the first quarter of the financial year and operational disruptions in some of our sites, particularly in Uganda.”

Despite the drop in demand, customer deposits, which are reported as liabilities until the unit is transferred to the homebuyer, increased by 20 percent to Sh1.8 billion from Sh1.5 billion over the period from pre-sales.

The monthly cash collections also increased by 73 percent compared to pre-Covid period helped by two completed projects in Vipingo at the Kenyan coast and in Uganda, and three newly launched projects in Nairobi.

As at March 31, the firm had sold 1,281 residential units with a sale value of Sh11.5 billion, representing 63 percent of completed units, under construction or market validation. 

Out of the units, the firm has posted Sh124.4 million profits from 27 units sold and transferred to buyers.

The firm expects to net Sh2.2 billion profit in the year ending March 2022 when some of the sold units are transferred to the homebuyers.

Last year, the firm floated Sh4 billion housing bond with a greenshoe option of Sh2 billion for the development of two projects in Nairobi – Riverbank Apartments and Loft Duplexes.