The high-end property developer and the owners of the World Trade Centre (WTC) twin tower, Overseas Realty (Ceylon) PLC posted a net profit of Rs.788.5 million for the quarter ended March 31, 2015 (1Q15), down by a paltry one percent from the same quarter last year.
The earnings per share was 55 cents. At the close on last Friday, the company’s share lost 80 cents (or 3.35 percent) to Rs. 23.10 a share.
The performance was largely due to reduction in the cost of selling apartments as the apartment sales fell by more than half.
The top line was weighed down by income from sale of apartments as such incomes fell 52 percent year-on-year (yoy) to Rs. 600.7 million.
This is because of the accounting treatment where the company had recognized the revenues from the sale of apartments of the Havelock City Residential project Phase II during the corresponding quarter in 2014.
But such revenues were now absent as the company is yet to begin the construction of the Phase III of the project to start selling.
However, the income from renting out the apartments increased by 15 percent yoy to Rs.487.5 million. The total revenue decreased by as much as 34 percent yoy to Rs.1.13 billion.
The company announced a Rs.976.6 million rights issue in March this year to purchase the two floors of the World Trade Centre building.
Those two floors are valued at Rs.762.4 million and the remaining funds will be utilized for working capital/investment purposes, the company said in its earnings update.
Overseas Realty currently owns about 84 percent of the space at the WTC and with the purchase of the two floors the space owned by the company can go up to 87 percent.
Finance cost was little changed yoy but the finance incomes fell 54 percent yoy to Rs.29.4 million. The company’s debt to equity ratio improved to 0.01 times as the company had retired debt and the interest cover stood at 24.23 times.
As of March 31, 2015 Company Shing Kwan Investment Limited had 53.75 percent stake of the company followed by 26.10 percent stake by Unity Builders Limited.
The State controlled private sector pension fund, the Employees Provident Fund (EPF) had 3.86 percent being the third largest shareholder of the company.
The company announced a final dividend of Rs. 1 a share and a second final dividend of 50 cents a share for the financial year ended December 31, 2014 which will be paid on May 15,2015.