Balwin impacted by construction lockdown


Balwin impacted by construction lockdown

Published Date: 2020-09-11 | Source: Stephen Gunnion | Author: Stephen Gunnion

Balwin impacted by construction lockdown

The residential property developer says it lost about three months of construction activity as a result of the lockdown.

Balwin Properties will report report a decline in first-half revenue and earnings after the Covid-19 lockdown hampered construction and sales of its apartments.

In a trading statement and business update, the residential property developer said its results for the year to end-August would reflect the unprecedented and evolving market conditions that had resulted from the pandemic. No construction activity took place from 26 March until the easing of lockdown restrictions to level 3 on 1 June - and even then the start-up was conducted on a phased basis. It estimated that construction activity was adversely impacted by about three months.

While it managed to conclude 350 sales during the nine-week construction lockdown period using its online platform, Balwin said due to the inability to complete construction, revenue for the six months to end-August would be about 35% lower than last year, with about 900 apartments recognised in revenue. Demand for its one and two-bedroom apartments remained strong, making up almost three-quarters of all apartments sold. About 1,667 apartments had been pre-sold beyond the reporting period and hadn't been recorded in revenue for the current period.

It said earnings and headline earnings per share for the six months were likely to between 55% and 60% lower than the 40c it reported for the first six months of last year, also impacted by higher operating costs due to increased activity in its Balwin Fibre business and the loss of rental income that it earned previously from its Greenpark apartments, which were sold to associate Balwin Rentals.

In May, Balwin held off on paying a final dividend for the year to end-February due to uncertainty surrounding Covid-19 and its implication for the company's cash resources.

Its shares fell 4.1% to R2.78 yesterday.

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