Centum Real Estate has issued a profit warning citing lower revaluation gains on investment property in the year ended 2022 compared to those posted in the year ended 2021.
A statement from the firm signed by the firm’s Managing Director Kenneth Mbae noted that based on the preliminary assessment of its projected unaudited financial results for the year ended March 31, 2022, net earnings will be at least 25 per cent lower than reported in the same period in 2021.
A profit warning is a regulatory requirement by the Capital Markets Authority for any listed firm whose full-year net earnings are likely to drop by more than 25 percent compared to the previous year.
The International Financial Reporting Standards(IFRS) also require companies that hold investment property to conduct independent annual revaluations of their investment property and to pass gains or losses through their financial statements.
According to Mbae, the revaluation movements will not have any impact on the overall solvency or cash flows of the Company.
Despite the profit warning, Mbae assured investors that in the current financial year they expect to complete substantial sales of investment property at a significant value uplift from the original cost and in line with the current valuation.” We also expect to have a significant increase in completed sales of residential units relative to the prior financial year,” he said.
SOURCES: Capital business
