BHC’s revenues up, profits decline
Pauline Dikuelo | Wednesday December 4, 2024 06:00
According to the parastatal’s latest financial results, it recorded a significant drop in profits after tax, down by P19 million to P10 million during the six months. The decline marked a stark decrease from the P29 million recorded during the same period last year. The reduced profitability has been attributed primarily to increased impairment expenses on rental receivables, according to the group's financial results. On the other hand, the BHC experienced a 31% increase in total revenue, reaching P358 million compared to P273 million in the prior year. Directors credited the growth to increases in rental income, contracts income and facilities management fees. The BHC CEO, Nkaelang Matenge, noted that an impairment expense of P19 million on rental receivables played a big role in the decline in profitability. “For the first half of the year, the receivables impairment expense rose to P32.4 million, a sharp increase from P13 million in the same period last year, primarily due to delayed payments from a major customer,” he said in a statement accompanying the results.
Rental income rose by P27 million, representing a 16% year-on-year increase, largely due to rental subsidies. Facilities management fees and revenue from contracts contributed P6 million and P54 million respectively to the revenue surge.
However, sales revenue declined from P8 million to P5 million due to limited housing stock availability.The Corporation’s Vacancy rate stood at 0.87 percent, representing 79 vacant units across the country, below its 1.5 percent target. During the review period, sales of 63 housing properties generated gains of P28 million, reflecting a sales margin of 71%. This compares favourably to the prior year when 56 units were sold for a total gain of P13 million and a margin of 53%. The sales mix was dominated by old stock, which accounted for 57 units and offered higher margins, while only six new units were sold. The Corporation’s total assets stood at P2.817 billion, up by P10 million from P2.806 billion in the previous year, driven by capitalisation of interest and staff costs into work-in-progress housing inventories. Investment properties decreased by P22 million year-on-year due to sales and depreciation charges while housing inventories increased by P106 million, reflecting payments for ongoing projects and capitalisation.
The BHC’s cash balance decreased significantly to P284 million, a drop of P155 million from the prior year, primarily due to loan repayments and project expenses. The Corporation’s total reserves stood at P1.66 billion, a slight increase from P1.65 billion the previous year.