DAWN Properties says business confidence is very low and has projected a difficult operating environment, as the country’s economy continues to decline.
BY FIDELITY MHLANGA
This comes after the property giant’s profit for the six months ending June 30 went down to $90 442 from $480 019 in the comparable period last year.
“Business confidence remains lacklustre and the overall economic conditions are expected to remain challenging,” the company’s board chairman, Phibion Gwatidzo said in a statement accompanying the half year results.
“As a board, we have considered and employed measurable strategies to open up new revenue streams in property development and we are continuously exploring ways to add value to the property investment portfolio.”
Group revenue totalled $2,3 million with the property investments and property consultancy segments contributing 58% and 42%, respectively.
Due to the economic challenges, the company decided not to declare a dividend.
“In view of the current economic challenges and subdued performance, the board has resolved not to declare a dividend for the period ended June 30,” Gwatidzo said.
Revenues were 23% higher than the same period last year.
The increase in revenue was primarily driven by improved performance from the company’s hotel properties.
Total liabilities were $10,8m from $10,4m in the same period last year.
Total assets grew to $95,4m from $95m in the prior year.
Group operating expenses stood at $1,7m, up from $1,2m incurred during the period ended June 30, 2016.
“The increase was primarily attributable to expenses incurred in renovating Caribbea Bay Hotel.
“In addition, the group also finalised the Zimra [Zimbabwe Revenue Authority] tax dispute and recognised the outstanding penalties and interest amounting to $302 000,” Gwatidzo said.
Despite the increase in revenue, the group recognised a pre-tax profit of $544 000, a 23% decrease from the same period last year.
The company said its balance sheet registered a modest growth largely due to an increase in inventory due to the ongoing construction work at Elizabeth Windsor Gardens.