Virus knocks Oryx into the red

Oryx Properties' headline earnings per share (HEPS) – a profitability gauge – dropped from 137.34c in 2019 to 3.88c in its past financial year.

18 September 2020 | Business

While current market conditions remain difficult, opportunities are presenting themselves in all property sectors. – Oryx Properties

Covid-19 measures devastating retail and hospitality in the last three months of Oryx Properties' 2020 financial year resulted in the locally-listed group suffering a loss of more than N$88.4 million in its past book-year.

In 2019, Oryx Properties reported total comprehensive income or a 'profit' of around N$312.8 million.

Results released on the Namibian Stock Exchange (NSX) yesterday show a negative adjustment of nearly N$152.96 million in the fair value of investment property caused the loss for the 12 months ended 30 June 2020.

“The properties were negatively impacted due to the Covid-19 pandemic with the significant impact on retail and hospitality related properties in the portfolio resulting in a negative fair value adjustment of N$153 million,” Oryx said in its statement on the NSX. The group's commercial vacancy rate deteriorated to 5.4% compared to 3.2% in 2019. “The increase is aggravated by the current trading environment which continues to put pressure on tenants' ability to remain profitable,” Oryx said. According to the group, lease escalations have been flat or negative for parts of the retail and office sectors and compressed for the industrial sector.





Oryx said debt collections remain under pressure.



The group's provision for bad debts increased to N$23.2 million, up nearly 170% from the N$8.6 million in 2019. This is due to the impact of Covid-19, as well as the application of IFRS 9 – a mandatory international financial reporting standard.



Earnings

Oryx suffered a loss of 110.63c in basic earnings per share (EPS) compared to a positive 533c in 2019. Headline earnings per share (HEPS) – a profitability gauge – dropped from 137.34c in 2019 to 3.88c.

Oryx Properties, listed on the Local Index of the NSX, declared no dividend per linked unit for 2020. Last year the dividend per linked unit was 2.75c. It declared a distribution per linked unit of 69.75c, down nearly 53% from 2019.

Oryx's net asset value per linked unit fell from 2337c to 2188c.



Income

Net property income for the year under review was nearly N$226.7 million, up around 1.5% from the 2019 financial year.





Oryx said property income increased despite the rent relief of N$18 million granted to tenants as a result of Covid-19 from April to June. “Excluding the rent relief, rental growth would have been 8.2% which is attributable to the residential acquisition made during the year,” it said.

In line with its strategy to diversify its portfolio, Oryx acquired a residential portfolio for N$86.7 million in October 2019, “one of the few assets classes to deliver growth for the year and helped reduce the impact of the negative fair value adjustments in the portfolio”.

The first phase of Urban Village, the Elisenheim convenience lifestyle centre, started trading in February this year and was completed at a total cost of N$102 million, Oryx said.

The group reported a residential vacancy rate of 9.3% for 2020.



Going concern

Oryx said due to the impact of Covid-19 and the uncertainty on the economy ahead, its board scrutinised budgets and cash flows for the year ahead.

The group is required to refinance N$199 million short-term debt and N$334 million (euro debt) long-term debt by next July. “While indications are positive that these debts will be refinanced with the respective banks, management has implemented mitigating actions should this not be the case,” Oryx said.

Its current available facilities amount to N$68 million, the group said.

“Oryx's balanced property portfolio is well placed to withstand the current economic downturn and management remains focused on strengthening the balance sheet, improving cash flow, retaining tenants and driving operational efficiencies to create a platform for growth that will provide sustained shareholder value in the long term,” the group added.

Oryx elaborated: “While current market conditions remain difficult, opportunities are presenting themselves in all property sectors and therefore management continues to seek opportunities that will deliver yield enhancing and long term growth to our unitholders.”

“The directors are of the opinion that Oryx will be a going concern for the foreseeable future from the date of this report,” it said.

Oryx closed at N$17.40 per share on the NSX on Wednesday, down 14% from the end of 2019.

It has lost about N$249 million in its market capitalisation by total shares in issue since the end of last year. On Wednesday, Oryx's market capitalisation was N$1.52 billion, making it the fifth biggest company on the Local Index.

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