UACN Property Records N2.9bn Loss as Finance Cost Soars to N5bn

UACN Property Records N2.9bn Loss as Finance Cost Soars to N5bn

UACN Property Records N2.9bn Loss as Finance Cost Soars to N5bn

Shareholders of UACN Property Development Company (UPDC) Plc, a member of the UAC of Nigeria Group, will have to wait longer before getting dividend as the company has recorded further loss for the year ended December 31, 2017.

The company had slipped into the red in 2016 with a loss of N1.551 billion, which it attributed to recognition of losses on certain projects and impairment of investments in one joint venture project, foreign exchange losses and negative performance of its hotel asset.

Although the company had assured stakeholders of efforts being made to ensure better performance in 2017, the audited results of the property development firm, showed that its loss position has worsened.

UDPC recorded revenue of N3.983 billion in 2017, down 20 per cent from N4.994 billion in 2016. While the company reduced administrative expenses from N1.256 billion to N859 million, finance cost soared due to huge interests paid on bank borrowings and overdrafts. Net finance cost jumped by 78 per cent from N2.835 billion in 2016 to N5.030 billion in 2017.

Consequently, UPDC ended 2017 with loss of N2.947 billion, compared with a loss of N1.551 billion in 2016. Chairman of UPDC Plc, Mr. Larry Ettah had last year told shareholders at the annual general meeting (AGM) that despite the challenging business terrain, the company continued its ongoing project developments in 2016 and commenced new ones in 2017.

“A key strategic imperative for 2017 is to deleverage the company. This is being achieved through deployment of an aggressive sales strategy, one for one Rights Issue that is about to be launched, and divestment from low yielding investment properties. The fundamentals of the company are strong and the brand remains positioned to deliver value to all stakeholders,” he said.

Ettah had said the Nigeria’s real estate market still presents substantial opportunities as well as a number of challenges for property investors and developers.

He said: “Cumbersome and time-consuming processes for land acquisition, insecure land title, infrastructure deficiency are few of the challenges of the sector. Existing concerns such as underdeveloped mortgage market, paucity of medium to long term infrastructure and financial institutions with reasonable interest rates are areas the federal government would need to pay particular attention to in the near future in order to move the sector forward.”

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