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Real estate developer Eastern Housing Ltd (EHL) saw a boom in plot sales in July-December of the current fiscal year, while its apartment sales dropped on a large scale.
The publicly traded company’s income from apartment sales plunged by 89 per cent year-on-year in the first half of the fiscal year 2022-23, while its earnings from plot sales jumped by 20 per cent.
Meanwhile, the firm’s capital gains from stock investments, foreign exchange returns on debt, write-backs on provisions, and charges related to financial operations jointly soared by 138 per cent on a year-on-year basis.
Despite a fall in apartment sales, the real estate firm’s net profit grew by 18.5 per cent YoY to Tk 29.17 crore in July-December of FY23 from Tk 24.61 crore in the same period last fiscal. With this half-yearly profit, the company reported the highest H1 profit over five years.
The apartment business heavily relies on construction materials. But recently, the prices of all sorts of construction materials such as rods, cement, and others, went up many times, shrinking its earnings from this segment, the company stated in a filing posted on the Dhaka Stock Exchange (DSE) website on Wednesday.
The company’s financial income includes the cash invested in short-term investments and marketable securities, foreign exchange gains on debt, write-backs on provisions, and charges related to financial operations.
The building maker logged total revenue of Tk 101.48 crore in H1 of fiscal 2022-23, of which Tk 88.96 crore came from the land business, while Tk 12.52 crore was generated from apartment sales, according to the company’s H1 financial report.
Although there was no detail about financial income in the company’s half-yearly report, its financial gain in the first six months of FY23 stood at Tk 11.97 crore from Tk 5.01 crore in the same period last fiscal.
The real estate developer in July-December of FY22 generated revenues of Tk 191.7 crore, of which Tk 74.12 crore came from land business, while Tk 117.57 crore from apartment sales.
The company spent Tk 53.58 crore on the cost of sales (COS) in July-December of FY23 which was Tk 142.58 crore in the same period last year.
The cost of sales indicates how much a retail or wholesale company spends on the products it purchases from suppliers for resale. The cost of sales appears as a direct cost on the income statement. It is used only by companies that do not manufacture their products for sale.
Officials of Eastern Housing Ltd said the company availed itself of the primary clearance from the Rajuk to run its second and third phase projects in Jahurul Islam City.
The land purchase was also going on for these projects alongside the first-phase ones. And the firm already purchased 65.03 hectares of land for the second and third phases of the projects, they said.
After the acquisition of the required lands, the project proposals would be submitted to the authorities concerned for final approval, they added.
The company also took all necessary steps on a priority basis to clear the housing project in the Amin Bazar area of Savar, the company sources continued.
A senior official of the company said the infrastructure construction for these projects was ongoing adding that some approved parts of them were already sold. As a result, income from land business increased exponentially this year.
EHL’s earnings per share (EPS) stood at Tk 3.13 for July-December of FY23 from Tk 2.64 for the same period last year.
The company gave a 20 percent cash dividend to its shareholders for the fiscal year 2021–22.
