UPDC Real Estate Investment Trust (REIT) Plc has posted strong financial results for the first half of 2024, with a significant profit after tax increase of 83.50% to ₦1.14 billion, compared to ₦620.98 million in H1 2023. This growth was underpinned by a 67.79% rise in total revenue, which reached ₦1.59 billion, up from ₦945.58 million in the corresponding period of the previous year.
Thank you for reading this post, don't forget to subscribe!The increase in revenue was primarily driven by a substantial 219.97% surge in interest income on deposits with banks, which grew to ₦507.62 million from ₦158.65 million in H1 2023. However, rental income slightly declined by 5.82% to ₦683.48 million, while interest income on assets measured at fair value through profit or loss (FVTPL) dropped by 92.20% to ₦5.95 million from ₦76.25 million.
Despite a 35.96% increase in the loss on financial assets held for trading, which rose to ₦20.44 million from ₦15.03 million, the REIT’s overall financial performance remained strong, buoyed by a net gain of ₦410 million from the disposal of investment property.
Operating expenses and impairment charges on receivables were significant cost factors, with impairment charges increasing by 15.94% to ₦376.33 million from ₦324.60 million. However, these costs were offset by the substantial gains in other income streams, leading to a pre-tax profit of ₦1.14 billion, an 83.50% increase from the previous year.
On the balance sheet, UPDC REIT’s total assets rose by 11.44% to ₦30.39 billion as of June 30, 2024, from ₦27.27 billion in June 2023. This growth was driven by a significant increase in cash and bank balances, which more than doubled to ₦5.81 billion from ₦2.38 billion. The company also saw a notable rise in property, plant, and equipment, which grew by 175.84% to ₦265.32 million, as well as in its investment properties, which increased by 4.43% to ₦24.05 billion.
Total liabilities slightly decreased by 9.06% to ₦883.36 million from ₦971.40 million in the previous year, reflecting prudent financial management. Shareholders’ equity also saw a healthy increase of 12.20% to ₦29.50 billion, up from ₦26.30 billion.
UPDC REIT’s shares are currently trading at ₦1.30, with a 52-week high of ₦2.20 and a low of ₦1.02. The company’s price-to-earnings ratio stands at 3.02x, and its earnings yield is an impressive 33.08%, indicating strong returns for investors.
Overall, UPDC REIT Plc’s H1 2024 results demonstrate the company’s resilience and ability to generate solid returns in a challenging economic environment characterized by high inflation and interest rates.
