Eastern Housing's profit dropped 18 per cent year-on-year to Tk 564 million in FY24, as apartment sales plunged for rising costs of building materials amid high registration costs and runaway inflation.
The lone listed realtor's earnings per share stood at Tk 6.04 in FY24, down from Tk 7.37 the year before, according to price sensitive information published on Monday.
The board of directors of the company declared a 19 per cent cash dividend for its shareholders for FY24, down from 25 per cent a year ago.
Property developers' earnings plunged as their larger segment of consumers, the middle-class, are running short of savings amid inflationary pressure, industry insiders say.
Inflation stayed persistently high above 9 per cent in the past 18 months through August this year. Over the last two months, it has remained more than 10 per cent.
Higher prices of goods and services continued to strain the purchasing power of consumers.Moreover, elevated registration and other fees discouraged buyers from purchasing apartments. The registration tax rate of apartments doubled in some areas, said the company in an earnings note.
The net operating cash flow, an indicator to show a company's ability to generate cash from its operations, stood at Tk 10.42 in the negative per share in FY24, as against a positive value of Tk 20.56 the year before.
The company explained that sales and collection in the apartment segment significantly plummeted during the period under review because of concerns over high registration costs.
Besides, the company received Tk 300 million from the sale of a single apartment project in Banani last year, but this year no such 'unusual' sales happened.
The company scheduled an annual general meeting for October 30 and the record date for entitlement of dividends is October 3.
The realtor is yet to disclose its annual sales figures. However, its sales revenue dropped 3 per cent year-on-year to Tk 1.64 billion in the nine months through March this year.
Apartment sales plummeted 47 per cent year-on-year to Tk 102 million in the nine months through March this year as the price hike of building materials has led to an escalation of apartment prices by up to 30 per cent depending on size and location.
Consequently, the demand for apartments fell in Dhaka, Chattogram, and other big cities across the country, according to the Real Estate and Housing Association of Bangladesh (REHAB).
On the contrary, land sales grew 3 per cent in the nine months to Tk 1.54 billion through March this year, compared to the corresponding period of the previous year.
Eastern Housing's shift in focus from building apartments to land development has proved to be a right way to go about doing business when the prices of construction materials shot up.
Stock performance
Meanwhile, the stock of Eastern Housing went down almost 1.67 per cent to Tk 76.5 per share on the Dhaka Stock Exchange on Monday, as the company reported a lower profit.
Listed in 1994, the stock traded at Tk 68.5 to 104.6 per share in the last one year. Eastern Housing had never remained stuck on the floor.
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