UAC Property Development Company (UPDC), a real estate investment firm in Nigeria, recorded its first total comprehensive profit for the first time in seven years.
BusinessDay findings from the firm’s financial statement showed the firm posted a profit of N14.8 million in the first nine months of 2023 compared to a loss of N470.7 million in the same period of last year.
The profit was driven by gains from changes in the value of its financial assets.
The gains, showed under ‘other comprehensive income,’
The firm’s current market value exceeding the original cost of their investments, bonds, and loans.
“The fair value changes are as a result of the difference in share price from the prior year of N3.00 to N3.75 per unit in the current year,” the company said in a statement.
Further findings showed the firm recorded a loss after tax in the first nine months totalling N105.3 million compared to the loss of N290.62 million reported in the same period of 2022, the reported loss was lower.
The firm’s operating expenses gulped 32.7 percent of its revenue.
Operating expenses increased on the back of an increase in administrative expenses which amounted to N1.18 billion from N0.84 billion recorded in 2022.
Nigeria’s headline inflation rose for the eleventh consecutive month to 28.20 percent, an 18-year high in November.
However, the company reported an increase in revenue which grew by 76.2 percent year-on-year to N3.7 billion in the period under review from N2.1 billion in the first half of 2022.
A breakdown of the revenue by category showed that the company generated N1.1 billion from the sale of property stock, N112.2 million from project/asset management fees, N1.73 billion from Deep Horizon Investment Limited’s sale of property stock, and N 493.7 million from UPDC Hotel Ltd. Revenue and N340.9 million from the UPDC facility management limited surcharge income.
Cost of sales, however, claimed 66.2 percent of the total revenue during the period, thereby pressuring the profitability of the real estate firm.
UPDC’s cost of sales increased by 89 percent to N2.5 billion in the period under review from N1.3 billion in the corresponding period of 2022.
The real estate company also recorded a decline of 39.8 percent in net finance costs to N197.1 million in the period under review from N327.9 million recorded in the same period of 2022.
Its cash and cash equivalent during the period under review amounted to N4.6 billion, a 52.3 percent decline from N3 billion reported in the same period of 2022.
Cash from operating activities grew by 28.6 percent to N1.8 billion in the first half of 2022 from N1.4 billion in the same period of 2022.
The real estate company also reported negative net cash from financing activities which amounted to N209.9 million in the period under review from N-170.8 million in the same period of 2022.
Net cash used in investing activities recorded a negative N5.4 million from a positive N56.5 million in 2022.
The property investment company with a market capitalisation of N18.7 billion. They are into the acquisition, development, sales, and management of high-quality, serviced, commercial and residential properties in the luxury, premium, and classic segments of the real estate market.
The Gross Domestic Product report from the National Bureau of Statistics revealed that real estate GDP growth in the third quarter of 2023 slowed down to 1.90 percent, a decrease of 2.66 percent compared to the same quarter in 2022.