Primetime Property Holdings has warned shareholders that profit will drop by more than half due to fallen market valuations.
The Botswana Stock Exchange listed property developer said pre-tax profit for the year ended 31 August 2019 will likely be 54 percent lower than the P134.9 million registered in August 2018.
“The primary reason for this decrease is the effect of year end market values of investment properties which are significantly lower in the current year than in the prior year. Kindly note that these fair value adjustments to investment properties are a non-distributable line item,” said Alexander Kelly, the managing director at PrimeTime Holdings, in a trading notice to shareholders.
PrimeTime‘s property portfolio was last valued at P900 million and is mostly anchored by retail income from some of the country’s popular shopping centres, accounting for 63 percent of revenue, while office buildings bring in about 36 percent of the income.
The anticipated fall in 2019’s profit comes at a time the company is assessing another potential drop in profit for this year. During the country’s lockdown that began in April and lasted in the third week of May, Kelly said they have projected a possible substantial drop in rental income and a risk that PrimeTime may breach on some of its loan payments, with the company planning to act immediately to assist some of their most at-risk tenants.
He said the support and assistance had been overlaid onto PrimeTime’s forecasted cashflow to highlight financial pressure points over the coming months and have already began talks with their financiers.
“We have compiled a risk schedule of PrimeTime’s tenants where we have assessed, in our opinion, their continued ability in the short/medium term to pay rent. We will only find out by month end whether they can and will pay rent,” Kelly told shareholders in April.