RDC profits decline on lockdowns
Property investment company, RDC Properties will see its profits tumble down by 90 percent to P129 million in its year ended December 2020 as a result of lockdowns and income reduction from hospitality industry.
The group announced that its profits before tax will be approximately between P129.7 million to P145.9 million lower than the P162.1 million reported last year.
RDC Properties outlined that the main reasons for the decrease are management’s conservative approach to the valuation of the investment property portfolio in the current period and a reduction of income from hospitality properties due to the challenging operating conditions in the extended Covid- 19 national lockdowns in Botswana. The group has properties in various countries including Botswana, South Africa, Madagascar, and the United States of America.
In a statement, the Group highlighted that the nature of the Group portfolio, diversified by geographical area has enabled the company to mitigate the impact of fair value adjustments on the portfolio. “Acquisitions in South Africa and the USA in Q1 2020 have been accretive and supported the Group.”
In its half year ended June 2020, the group profits declined by 27 percent to P22 million. Last year the group acquired two properties, which have increased the portfolio to seven properties within the Cape Town area and a total property value of R970m. Capitalgro issued shares under a rights offer which RDC followed in full to maintain its ownership stake at 61.1 percent. The Group Managing Director, Guido Giachetti said the group anticipates the Radisson Red Rosebank Johannesburg to open in June this year while the 108 Albert Rd in Cape Town should be completed by May this year.
In the United States, the Group has reinvested the proceeds from the City Lights Project into two new projects; one is the Research Court in Atlanta, Georgia consisting of a tenanted office park of two buildings valued in excess of US$ 10m, equity of US$ 2.0m, represents 60 percent stake and provide a minimum net yield of eight percent.