brand logo

Overseas Realty revenue drops in 2020

02 Apr 2021

Overseas Realty (Ceylon) PLC (ORCL) recorded revenue of Rs. 2.2 billion in 2020, which is a 5% drop from the previous year. According to ORCL’s annual report, the company’s group revenue and operating profit contracted by 46% and 49%, respectively, and stemmed from the recorded low revenue. ORCL’s first real estate development project in Sri Lanka was the World Trade Centre, Colombo (WTC) and it is currently developing, through its subsidiary Mireka Capital Land (Pvt.) Ltd., Havelock City. Meanwhile, the Sri Lankan economy recorded a decline of 5% of the Gross Domestic Product (GDP) for the end of Q3 2020 compared to a growth of 2.4% in 2019. In addition, the agriculture, industry, and services segments, the major components of the economy, have decreased their share of contribution to GDP by 2.5%, 9.5%, and 2.6%, respectively, and real estate activity has also declined by 3.2%. The annual average inflation was 4.6% (2019 – 3.5%) and the increase in inflation in the year was mainly driven by the increase of prices of food items. The Sri Lankan rupee depreciated by 3% against the US dollar during the year 2020. In December 2020, the Average Weighted Prime Lending Rate (AWPLR) decreased to 6.5% compared to 9.94% in the previous year while the Average Weighted Fixed Deposit Rate (AWFDR) decreased to 7.14% compared to 10.05% in the previous year. The report reflecting on the challenging macroeconomic conditions faced by the country, stated: “In 2020 the company recorded a group revenue of Rs. 4,797 million (2019 – Rs. 8,922 million), which was 46% lower than last year mainly due to decreased revenue from Havelock City apartment sales.” The main sources of income were derived from Mireka Homes (Pvt.) Ltd. (MHL); through sale of condominium units at Havelock City (HC), Overseas Realty (Ceylon) PLC; through leasing of office space at the WTC and Realty Management Services (Pvt.) Ltd. (RMS); and through property servicing, agency commission, and trading of imported lighting solutions.  “The revenue of MHL from the sale of condominium units amounted to Rs. 2,192 million (2019 – Rs. 6,098 million), a decrease of 64% over the previous year due mainly to decreased revenue recognition during the year from Havelock City Phase 4 apartment sales. The revenue from leasing spaces at WTC decreased by 6% to Rs. 2,292 million (2019 – Rs. 2,409 million), due mainly to concessions given to tenants and lower occupancy levels during the year,” the report stated. The public quoted company listed in the stock exchange recorded a gross profit amounting to Rs. 2,429 million (2019 – Rs. 4,251 million) with a 43% decline compared to the prior year. Gross profit from property leasing of the WTC Colombo was Rs. 1,758 million (2019 – Rs. 1,871 million), a decrease of 6% over the previous year due mainly to lower occupancy levels. Gross profit from the sales of apartments at Havelock City was Rs. 573 million (2019 – Rs. 2,261 million), which was a decrease of 75% over the previous year, due mainly to lower revenue recognition from Havelock City Phase 3 and Phase 4 apartment sales. The company’s operating profit (excluding fair value gain/loss) of Rs. 1,508 million (2019 – Rs. 1,605 million) was 6% lower than last year due mainly to lower occupancy levels. Consequently, the operating profit margin of 68% (excluding fair value loss) was 1% lower than the last year. Singapore-based real estate specialists, Shing Kwan Group (www.shingkwan.com), holds approximately 61% of the existing issued share capital of the company. Shing Kwan Group’s portfolio of expertise includes investment, development, and management of real estate in China (Nanjing, Beijing, and Shanghai), Indonesia (Jakarta), and Singapore.    


More News..