Orion earnings nearly 48% down
Property group Orion Real Estate reported headline earnings a share of 42c for the six months to December 2016, nearly 48% lower than the 80c for the matching period a year before.
Property group Orion Real Estate reported headline earnings a share of 42c for the six months to December 2016, nearly 48% lower than the 80c for the matching period a year before.
Management said that while trading conditions had remained difficult during the reporting period, the company’s future prospects had improved, with an increase in revenue because of an uptick in occupancy levels and improved controls being implemented. Orion’s revenue increased 11.45% from R42.8m to R47.7m when comparing the two periods.
“This is as a result of the normal lease escalations as well as a marginally better occupancy rate within our properties,” said CEO Franz Gmeiner.
A change in accounting policy also increased the group’s overall income.
In the prior year, the gross revenue line included finance income from interest on overdue debtor accounts, while in the current year interest on overdue accounts has been shown in the finance income line on the face of the income statement.
A dividend relating to the 2015 financial year was paid in November to the sum of R14.82m. Then, in December, a dividend of R5.676m was paid relating to the 2016 financial year.
The headline earnings for the group showed a loss because one company within the group, Erf 195 Elma Park, had suffered a loss for the period. Orion’s direct, operating and management costs increased from R30.5m to R36.3m, an increase of 18.9%.
The majority of the increase in direct, operating and management costs was as a result of an increase in utilities of R5.5m where disputes were logged with the council along with an increase in levies of R1.3m.
But there was a decrease in administrative and management costs because of a reduction in salaries for the same period year on year as well as a reduction in the bad debts written off for the corresponding period.
THE [REVENUE RISE] IS AS A RESULT OF THE NORMAL LEASE ESCALATIONS AND A MARGINALLY BETTER OCCUPANCY RATE