Endeavour Holdings net profits dip again

Endeavour Holdings Ltd (EHL) has reported a $4.4 million net profit after the company experienced a decline in revenue from $86.7 million in 2020 to $72.1 million for the year ending April 30, 2021.

EHL issued its annual report on Monday, which noted a net profit for the year ended 20 April, 2021 ($4.4 million) which is net of fair value adjustment write-down of $26.4 million on investment properties as compared to $6.4 million for 2020 net of fair value adjustments write down of $26.2 million.

The report read: "Fair value adjustments on the investment properties, primarily the Price Plaza Mall have been negatively impacted as future cash flows have been discounted to account for the possibility of further declines in rental income due to the effects of the covid19 pandemic.

The document noted that net revenue from contracts from customers for the year ended April 30, suffered a decline over the previous year due to varying levels of rental discounts and rebates given to the tenants primarily of Price Plaza amounting to $12.6 million.

"Occupancy levels, however, have remained virtually unchanged except for the Price Plaza Mall where a major tenant was lost in October, 2020," the report noted. However, gross rental revenue for the mall remained the same as the loss of revenue was offset by a full year's effect from rent increases that occurred during the latter half of the previous financial year.

In his statement, EHL chairman John Aboud said the company "experienced the full effects of the covid19 pandemic" during the financial year.

Noting the closure of non-essential businesses from March to July, 2020, and the varying restrictions, he said, "These restrictions significantly affected our primary tenants in Price Plaza Mall where our tenant pool comprises of restaurants, fast food outlets, bars, casinos and the cinema (amongst others).

"In keeping with the policy adopted by EHL in the 2020 Financial Year, we extended concessions where possible to those tenants whose businesses were severely impacted by the four restrictions with rental discounts in the amount of $12.6 million having been granted to various tenants at Price Plaza Mall.

"In addition to the impact of covid19 on business in the country, EHL’s revenue for the 2021 Financial Year was also impacted by the loss of revenue from Trinbago Commercial Development Company Ltd, the operators of MovieTowne, who vacated Price Plaza Mall in October 2020."

EHL's total assets fell from $887.4million in 2020 to $865.7million in 2021, attributed primarily to the investment properties fair value negative adjustment of $26.4 million and was partially offset by the increase in cash and cash equivalents of $9.2 million from $31.5 million in 2020 to $40.7 million in 2021 owing to the deferral of the September 2020 loan principal payment.

Meanwhile, trade receivables decreased by $4.5 million from $17.4 million in 2020 to $12.9 million in 2021 primarily because of the reversal of the property tax accrued reimbursable expense of $6.5 million for the years 2016 to 2018.

According to the report, current liabilities decreased by $14.9 million from $50.8 million in 2020 to $35.9 million in 2021.

It noted that a key elements of the decrease were a reduction of $6 million in taxation payable owing to the zero-per cent taxation on profit as the company has gained listed SME (small and medium enterprises) status, coupled with a reduction of $8.4 million in trade and other payables due to the reversal of the property tax accrued expense of $8 million for the years 2016 to 2018.