UACN Property Development Company Plc declared a loss of N15.883 billion for the full year 2019 compared to a loss of N15.057 billion recorded in the corresponding period of 2018.
The full details of the real estate company's performance are contained in Audited financial statements for the year ended December 31, 2019, published on the website of the Nigeria Stock Exchange (NSE) on Friday night.
Revenue decreased by 6%, from N2,303 billion in fiscal 2018 to N2,158 billion in the analyzed period.
Loss before taxes increased from N13.244 billion to N16.195 billion, signaling an increase of 22%.
Losses in the year jumped 5%, from N15.057 billion to N15.883 billion.
Likewise, Loss per share increased from N5.79 to N6.12, increasing 6% between periods.
Total Equity fell to N2.172 billion from N18.055 billion in FY2018, translating into a drop of 88%.
Meanwhile, UAC of Nigeria Plc – the parent company of the loss-making company – announced plans to sell its majority stake in UACN Property based on the latter's inability to provide shareholder value, having recorded losses for four consecutive years.
UACN Property faces a double blow of financial loss and loss of support from its parent company, which currently owns 93.9% of its shares, should the divestment be successful, as planned in July.
Fola Aiyesimoju, managing director of the UACN group, told Reuters that the company increased its stake in UACN ownership from 64.2% to 93.9% through a recent rights issue, where it converted its bridge loan into equity to save money.
UACN Property raised N250 million in capital through a share sale in April. It invested in Nigeria's luxury real estate market at a time when the economy was expanding.
But exorbitant interest rates have hurt margins and it is still recovering after a recession four years before the coronavirus pandemic outbreak, adding to the fear that this will occur if the current loss trend persists a little longer.
UACN Property closed the trade today on the NSE floor at N0.92 per share, down 8%.
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