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Earnings Report Overview: UPDC REIT FY:2023



Article Summary

  • Profit Growth: UPDC REIT’s first quarter profit after tax increased by 4.69% compared to the same period in 2022, driven by rental income and interest income growth.
  • Market Performance: UPDC REIT had a market capitalization of ₦8.4 billion and its trading price rose from 3.0 to 3.15 in the first quarter of 2023.
  • Parent Company Success: UPDC recorded a 614% increase in revenue and a profit before tax of ₦331 million in 2022, focusing on property sales and delivering housing units.

Key UPDC REIT Highlights in 2023

Last month, UPDC REIT released its first quarter financial statement for the period ended March 31, 2023, in which it reported a profit after tax of ₦303 million, a 4.69% increase from the first quarter of 2022 despite recording a 150% loss in the fair value of investment property.

The improved performance is a result of the 8.1% growth in rental income and a 42% increase in interest income, particularly fixed deposits which accounts for 65% of interest income earned within that period.

As of March 31, 2023, UPDC REIT had a market capitalization of ₦8.4 billion while its trading price rose from 3.0 to 3.15 between Dec 30th, 2023 and Mar 31, 2023. Managed by Stanbic IBTC Asset Management, the net assets attributable to unitholders grew by  4.79% to ₦26.4 million as of Mar 31, 2023.

Last month, the UPDC REIT’s parent company, UPDC, announced that it recorded a 614% increase in revenue from ₦825 million in 2021 to ₦5.9 billion in 2022 as a result of ₦5.1 billion in property sales. Thus registering a profit before tax of ₦331 million for the 2022 financial year.

The CEO attributed this profit to a focus on the acquisition and recapitalization of projects, particularly those in the middle-income segment to deliver 1,500 housing units to the real estate market over the next 5 years.

The financial report released by UPDC REIT for the quarter indicates that it was a successful start of the year for the institution.

After recording a major loss of 4.4 million in 2021 as a result of the pandemic, this Q1:2023 result coupled with the FY:2022 year-end results suggests that it’s on an upward trend.

However, while remarkable, fixed deposits can’t be relied on as a main source of revenue for the REIT. Other avenues like rental income should be exploited by executing stalled and conceptual projects (e.g. Festival Flats and Project Alpha) to improve the financial earnings.

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Author: Bisi Adedun