JSE-listed Balwin Properties’ results for the six-month period ended August 31 were impacted by the unprecedented and evolving market conditions brought about by the coronavirus pandemic.
Consolidated earnings a share and headline earnings a share for the period are, therefore, expected to decrease by between 55% and 60% over the prior corresponding period.
Despite the welcome interest rate relief through the 275 basis point reduction in lending rates since the start of the financial year, market conditions remain challenging for the consumer, the company notes.
In response, Balwin has continued its marketing campaigns to clients to continue to drive sales where necessary.
Owing to the inability of the business to complete construction as a direct result of the national lockdown, revenue is expected to decrease by 35% year-on-year.
Demand for one- and two-bedroom apartments remained strong and accounted for about 74% of the total apartments sold.
The gross margin of the group is expected to remain consistent with that of the prior corresponding period at 25%, but will reduce slightly when compared to the prior financial year.
Cost management remains a priority area, with overhead costs being carefully monitored and aggressively managed.
Operating costs of the company are expected to record an inflationary based increase when compared with the prior corresponding period, however, the group operating costs are expected to increase by about 12% as a result of the increased activity in Balwin Fibre.
The company has continued to grow its management team during the period in an ongoing effort to strengthen the leadership team.
While remaining apprehensive over the prevailing macroeconomic climate and fiscal policy uncertainty, Balwin says it remains positive about the resilience of its product as demonstrated by the sustained demand by its customers.
It notes that this is evidenced through continued strong sales, enhanced by the successful recent launch of the online sales platform.
Balwin expects to release its results on or about October 12.