Centum Real Estate, the property arm of Nairobi Securities Exchange (NSE)-listed Centum Investment Company, recorded Ksh174 million in profit after tax in the year to March 2023 – representing a massive turnaround from the Ksh486 million net loss it posted the previous year.
The big turnaround has been attributed primarily to valuation gains in the Centum RE portfolio. Centum RE’s portfolio includes hundreds of high-end apartments and villas in Nairobi and Kilifi in Kenya, and Entebbe in Uganda.
“The group recorded property valuation gains … on the back of extensive infrastructural investments within our land banks and accelerated development activity by third party development,” the company noted in a statement.
Gain in Centum’s real estate portfolio rose from Ksh513 million to a whopping Ksh2.1 billion. The company saw loans weigh on its balance sheet, exacerbated by a weak shilling, as finance costs hit Ksh889.7 million up from Ksh794.7 million.
Centum RE’s operating expenses also grew to Ksh748.4 million in the year ended March 2023 up from from Ksh502.1 million the previous year.
“The increase in finance cost in the year is explained by the depreciation of Kenya shilling against the US Dollar 16 percent in the financial year 2023 resulting in unrealised foreign exchange losses on the USD denominated liabilities,” Centum RE stated.
Revenue from Centum RE’s residential units increased as well, from Ksh1.8 billion to Ksh1.9 billion in the year ended March 2023. Gross profit on residential income however, slid to Ksh285.6 million from Ksh334.7 million the previous year, on increased cost of sales.
“Of the 895 residential units that have been completed, an additional 222 met the revenue recognition criteria and were recognised during the year ended 31 March 2023,” the company stated.
“We expect revenue and profit from the balance of these units to be booked in the financial year ending 31 March 2024.”