ZIMRE Investment Property’s profit for the six months to June marginally rose to $1,126 million from $1,109 on the back of rising operating costs.
Despite recording a 25% growth in revenue to $3,5 million, operating and administrative costs increased as the debtors’ book grew. Total administration costs for the period under review increased by 31% compared to the same period last year resulting in an operating profit of $1,6 million.
Basic earnings per share rose to US0,07 cents from US0,06 cents “Rental income was adversely affected by the constrained liquidity situation with total rental income recording a 4% growth to $1,94 million from $1,86 million over the same period last year. Collection of rent also slackened due to challenges being experienced in the economy and dropped to average 97% compared to 100% over the same period last year. Void ratio from 9,1% to 11,8%.” the company said.
“Portfolio debtors grew by 19% within the six-month period to June 2013 and have become a serious cause for concern. Rigorous efforts to collect and recover outstanding debts are being pursued and will remain a priority focus area for the company. A provision for doubtful debts of $612 780 has therefore been made.”
Rental income contribution reduced to 53% from 70% during the same period last year while projects income contribution rose to 43% from 21%.
The sector, according to the company, experienced an increase in rent arrears and void space as some businesses ended up vacating, closing down and downsizing.
“Access to lines of credit remained constrained with both local and foreign lines of credit either too short and expensive for long-term property development projects or unavailable altogether,” the company said.
Turning to existing projects, the company announced that 152 out of 338 stands in Masvingo had been sold at a value of $2,69 million.
“To date, 54% of the project’s cost of $4,96 million has been recovered. Sales are progressing slowly due to general down-turn in the economy and lack of mortgage finance in particular,” said the company.
Outgoing Finance minister Tendai Biti has projected that Zimbabwe’s economic growth rate will slow down to 3,4% from the initially projected 5,4% due to underperformance of key sectors.