Overseas Realty (Ceylon) PLC (OSEA) reported a net profit of Rs.878.8 million or 72 cents a share for the quarter ended in September (3Q17), up 17.5 percent from a year ago as the real estate group’s top and bottom lines received a fillip from higher apartment
sales revenues. Until the September quarter, the company was unable to recognize the revenues from the sale of apartments in its Havelock City Phase-Three. But the project has reached the required completion level of 25 percent, qualifying such pre-sales to be recognized in the financial statements under the accounting standards.
The revenue from apartment sales during the quarter was Rs.504.7 million, significantly up from the Rs.157.6 million recorded in the comparable quarter, last year.
Meanwhile, the total sales of the group, which comprises of rental income, apartment sales and other services, rose by as much as 67.3 million year-on-year (YoY) to Rs.1,076.5 million.
“As at end September 2017 almost 50 percent of Phase-Three apartment units had been pre-sold. Piling works of the Havelock City Commercial Development is currently underway and is scheduled to be completed in March 2018,” the company said in a statement following the release of its interim account.
The company spent heavily on promotion and advertising on its Havelock City apartments during recent times. The total promotional and advertising spend by the company has tripled to Rs.47.1 million for the quarter from about Rs.15.5 million during the comparable period in 2016.
Havelock City project, which also has a Phase-Four, was scheduled to commence in August. Both the Phase-Three and Phase-Four of the project are slated to be completed by end 2019 and 2020 respectively and will add 600 new apartment units.
Meanwhile, the Havelock City’s commercial complex will consist of a world class ‘A grade’ office tower and a shopping mall built to international standards with a fusion of retail, dining
In January 2017, the company raised Rs.7.3 billion via a rights issue to fund the proposed mixed development project of Havelock City (Private) Limited, as a sub-subsidiary of OSEA.
The rental income of the group, which consists of property leasing at the World Trade Center (WTC) Colombo, also rose by about 17 percent YoY to Rs.520 million.
“The company expects to maintain good occupancy levels during 2017,” the statement said.
As of September 30th 2017, Singapore based Shing Kwan Investment Company Limited held 38.43 percent stake in the company.
Jiangsu Tao Shing Pee Education Foundation, an entity established by OSEA Chairman S.P. Tao held another 24 percent stake being the second largest shareholder.