FMP reports 42pc growth in revenue

Listed property firm, First Mutual Properties ( FMP), reported a 42 percent growth in inflation-adjusted revenue to $2,9 billion for the year to December 31, 2022 from $2 billion in the prior year.

Despite the revenue growth, net property income after administration expenses was $140,5 million compared to $589,4 million in the comparable year.

The period under review was characterised by economic challenges which had a knock on effect on businesses and the property market.

Inflationary pressures and supply chain disruptions had a spillover effect on the local economy, leading to an increase in local

US dollar inflation. The Zimbabwean dollar depreciated by 516 percent against the dollar, and annual

US inflation rose to 244 percent at year- end from 61 percent in December 2021.

The property market fundamentals in Zimbabwe were also mixed in 2022.

The leasing market for commercial space was the most active segment, with buoyant activity in the retail and industrial sectors. However, the office segment was subdued because of the need for people to readjust their newly-formed working habits from “working from home” to “back to the office”. The office experi

CBD enced the highest vacancy rates, forcing most owners to remodel their properties to cater to the

SMEs sector. Limited commercial property developments were seen during the period under review, largely due to huge investment requirements.

“The industry grappled with “twin evils” of rising defaults on lease obligations and construction cost inflation. Management continues to closely manage these risks given their potentially huge impact on the company’s strategy,” said chairman Elisha Moyo.

For FMP, foreign and local currency rental mix was 70 percent to 30 percent at the end of the year. According to Moyo, this enabled the company to preserve value from foreign currency and inflation risks while creating capacity to finance its ongoing capital and growth expenditure programmes from internal resources.

An independent property valuation conducted by Knight Frank Zimbabwe as at 31 December 2022, valued the property portfolio at $109,3 billion from $22 billion, representing a growth of 397 percent.

The FMP board has resolved that a final dividend of $175,4 million being 14,1821 cents per share and an additional US$ 150,000 be declared from the profits of the company for the fourth quarter ended 31 December 2022.

This brings the cumulative dividend for the year ended 31 December 2022 to $477,8 million being 38,5786 cents per share.

Looking ahead, FMP remains focused on delivering on its strategy despite the environmental uncertainty caused by global geopolitical tensions and a volatile and complex economic environment.

“This involves developing a sustainable and well-diversified business portfolio, delivering on new projects within budget, schedule and acceptable quality as well as creating value for all our stakeholders,” said Moyo.