Slight rise in operating expenses which went up by eight per cent to end year at US$1.10 million

Kingston Properties Limited (KPREIT) is reporting a 26 per cent increase in rental income, but net profits are down 72 per cent during 2020.

For the year ended December 31, 2020, the real estate company reported rental income of US$2.13 million, which is 26 per cent more than the US$1.69 million reported for 2019. Rental income for the fourth quarter amounted to US$659,906, up from the 2019 posting of US$427,249.

Operating expenses for the year under review rose eight per cent to US$1.10 million relative to the US$1.02 million posted during 2019. Operating expenses for the December quarter amounted to US$296,184, marginally up from the US$$284,338 posted for the comparable period in 2019.

As such, results of operating activities before other gains amounted to US$1.03 million, a 53 per cent increase when compared to the US$673,797 posted last year. Fair value gain on investment property totalled US$307,539 for the 2020 period relative to the previous year’s gain of US$1.61 million.

Increase in fair value of other investments amounted to US$85,219, while the amount in 2019 was nil. Miscellaneous income amounted to US$3,136 (2019: US$12,478), while impairment losses on financial assets amounted to US$2,991 relative to US$9,481 reported in the previous year f 2019.

Slight rise in management fees

Management fees amounted to US$69,673, 11 per cent above 2019’s US$62,994. Loss on disposal of investment property amounted to US$78,392, down from the US$107,565 posted in 2019.

Operating profit closed the year at US$1.41 million, down from the US$2.24 million booked in 2019. Operating profit for the fourth quarter amounted to US$678,451, down from the 2019 figure of  US$1.80 million.

Net finance costs closed 2020 at US$817,082 relative to net finance cost of US$238,862 for the 2019-year end. Of this, finance cost and finance income amounted to US$1.03 million (2019: US$415,729) and US$212,837 (2019: USD$176,867), respectively.

This resulted in a profit before taxation of US$597,347, compared to the profit before taxation of US$1.99 million for 2019. Tax credit for the year amounted to US$15,378 (2019: US$200,821), resulting in net profit of US$612,725 relative to US$2.20 million in the comparable period last year a 72% decrease.

Moreover, total comprehensive income for the year was US$612,725 whereas total comprehensive income for FY2019 was US$2.20 million. Earnings per share amounted to US$0.0009 for the period relative to earnings per share (EPS) of US$0.0032 in 2019.

For the quarter ended December 31, 2020, EPS was US$0.0008 (2019: US$0.003). Notably, KPREIT stock price close the trading period yesterday March 01, 2021 at J$7.25 with a corresponding P/E of 56.21 times.

As December 31, 2020, assets totalled US$45.60 million, 14 per cent more than the US$39.93 million booked as at December 31, 2019. The growth was mainly due to a 59 per cent increase in ‘Investment Properties’ which amounted to US$38.13 million versus US$23.94 million at the end of the 2019.