Mlimani pulls Turnstar down
Turnstar Holdings Limited is optimistic that its rental revenues from its Tanzania properties will improve as the current vacancies continue to affect the group’s results.
The group profits for the year ended January 2021 declined to P81,3 million, compared to P116 million recorded last year. Botswana operations recorded a revenue of P134,5 million, Tanzania recorded P105.6 million while Dubai recorded P5 million.
Turnstar Holdings Group Managing Director, Gulaam Abdoola highlighted that vacancies in the Commercial Office space in Dar es Salaam continue to affect the Group results.
He pointed out that due to the vacancies in the Commercial Office space, and the reduction in Conference Centre income due to COVID 19, Mlimani has reported a Fair Value loss for the year. “However, the retail mall is performing to its optimum capacity. The Group is optimistic that the trading conditions in Tanzania will improve in the near future. The operating expenses are largely of a fixed nature, and as such, an increase in the rental revenues from the letting of the office space and conference centre, will convert directly into additional operational profits.” Government Offices have relocated from Dar es Salaam to Dodoma, resulting in a significant oversupply and vacancies in commercial offices. Turnstar experienced a 65percent vacancy rate.
Due to the lockdowns and movement restrictions last year the group granted rental rebates to its tenants and this led to decline in reduced rental revenues by approximately P12.28 million. “A strategic decision was made to grant substantial rental concessions to our retail and commercial tenants who could not operate during the initial lockdown periods.” However, Botswana properties recorded substantial Fair Value Gains.
During the year, the US dollar appreciated against the Botswana Pula and the Group had a net forex loss on the US dollar loan of P2.6m, compared to a net forex gain of P10.44m in January 2020, when Turnstar had a corresponding US dollar intercompany loan in Mlimani. The group experienced a drop in the share price due to overseas funds exiting Botswana, as a results of the European Economic Community grey listing. The company’s net asset value per share is P 2.89.