Varia US Properties increases revenue and profit
Varia US Properties increased total revenue by 38% in the financial year. Profit even increased by almost 72% compared to the previous year.
As of December 31, 2019, the real estate company held a portfolio of 53 properties with a total of 10,896 residential units in 19 American states. The property value amounted to $915.1 million as of the reporting date (PY: $767.5 million). The occupancy rate was 93.8% (PY: 93.7%).
Annual effective gross income increased from $86.0 million to $99.4 million. This was primarily due to the growing portfolio and higher rents, Varia reports. Total revenues were 139.5 million, up from 100.8 million a year earlier.
Total operating costs increased from 50.2 to 59.4 million and, as a result, the Ebitda margin decreased by 2.7% to 40.9%. Net operating income increased from 50.6 to 80.0 million, and the bottom line remains a profit for the period of 42.8 million (PY: 24.9 million). Earnings per share were $4.75 (prev. yr.: $2.79). The increase was said to be due in particular to higher fair value adjustments of $40.0 million.
Varia used the proceeds from a CHF 50 million unsecured corporate bond to acquire three properties with a total of 1,261 residential units in the states of Missouri and Tennessee. The company sold two non-strategic properties with a total of 104 residential units in Colorado and Texas during the year under review.
Following quarterly distributions in August and November 2019 and in February 2020, the company plans to distribute CHF 0.50 per share again on May 12, 2020. Due to the global spread of the coronavirus, this year's Annual General Meeting will be postponed to June 26, 2020.
The impact of the Corona pandemic on the overall economy cannot be quantified at this time, Varia informs. However, it is currently closely monitoring the revenue and expense sides, as well as the portfolio valuation. Every effort will be made to reduce the impact on financial results. If the economic conditions allow, a capital increase will be proposed to the shareholders.
"We remain very confident about our business model and the potential of Varia US Properties despite the current impact of the coronavirus crisis," said Patrick Richard, executive member of Varia's Board of Directors. "In the coming weeks and months, he said, the focus will be on securing rental income and reducing non-essential costs. (ah)
