NAP mitigates impact of BCL closure on its profits

03rd November 2017
NAP MD: Tobias Mynhardt Source:The Midweek Sun


By Keikantse Lesemela - Reporter

Property investment company New African Properties is focussing on the best management practices to sustain the company’s profitability on the back of the negative effects caused by the closure of Botswana Coal Limited mine in Selibe Phikwe. Commenting on the published results for the year ended July 2017, NAP Chairman John Mynhardt and Managing Director Tobias Mynhardt said the company has exposure to Selibe Phikwe which has been impacted by the closure of BCL last year.

“There has been an increase in both vacancies and arrears due to this and management is actively managing the affected properties to mitigate the impact as best as possible,” said Mynhardt. The exposure to Selibe Phikwe is 2.7 percent of the total property value and 3.4 percent of total rental at year end. The company has recorded five percent decline in profits to P199.4 million including non-distributable gains of P62.2 million against P82.4 million in 2016. Net asset value increased by five percent to P1.33 billion from P1.27 last year.

The company indicated that it has renewed 85 percent of leases expiring during the year at an average increase in line with normal escalations and re-let seven percent to new tenants at an average increase of 10.8 percent. Vacancies increased from 1.2 percent to 3.2 percent during the year and amounted to 4139 meter square at year end of which 424m2 has been let. Selibe Phikwe properties account for 1124 meter squared and 27 percent of total vacancies at year end. Mynhardt said the expiry of the leases in Selibe Phikwe is 64 percent, 14 percent and nine percent in each of the next three financial years and 13 percent thereafter.

The tenant composition by the end of the year was 53 percent listed and multinational companies, only one percent nationals, nine percent government and the balance of 37 percent smaller tenants.“It is however expected that the adverse conditions in Selibe Phikwe will continue and management will continue to focus on how best to manage this impact. NAP remains well positioned to fund developments and acquisitions with available debt capacity,” said Mynhardt.

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