Eastern Housing’s profit jumped but not dividend

The Eastern Housing Limited, one of the country's oldest real estate companies, reported 28% growth in net profit in fiscal 2020-21 and reached the pre-pandemic level but it declared the same amount of dividends for the last two years.

At the end of the last financial year, its total net profit stood at Tk37.15 crore and earnings per share at Tk3.98, compared to Tk29.13 crore and Tk3.12, respectively, in the previous year.

Despite the profit growth, the company declared a 15% cash dividend for its shareholders for the last financial year.

Despite a 16% drop in profit, in fiscal 2019-20, the company had paid a 15% cash dividend, compared to a 20% cash dividend in the previous year.

Eastern Housing officials declined to make any comments on this issue but an official of the company, seeking anonymity, said, "Due to the pandemic shocks, the company opted to keep the cash in its accounts, and thus it declared much less dividend for its shareholders."

To approve the dividend and annual accounts and others, the company will arrange an annual general meeting (AGM) on 10 November. To entitle the shareholders for the AGM and the dividends, the company has set the record date for 7 October.

Last year, the company launched two housing projects in Dhaka for middle-income people who could not buy high price apartments in the capital.

The company has already commenced the construction work of the two large projects in Dhaka's Mirpur and Chalabon areas, comprising 87 and 283 flats respectively.

"Intending to provide affordable apartments for the middle-income group, we have commenced construction work of two projects. We expect that the company will earn Tk300 crore by selling these flats," Eastern Housing Managing Director Dhiraj Malakar said in the company's 2019-20 annual report.

"Considering the current situation of real estate business, we strategically focus on more investments in the land projects. But we still have taken the new apartment projects with much caution to protect our investments."

Meanwhile, the company has made all-out efforts to get approval from Rajdhani Unnayan Kartipakkha (Rajuk) for the second and third phases of the Jahurul Islam City at the capital's Aftabnagar.

"We are in the process of complying with the regulatory norms of the government in respect of our Mayakanon Land Project at Amin Bazar, which is about 400 acres," said Dhiraj Malakar.

Real estate companies in Bangladesh have now almost run out of ready apartments – an opposite picture of what they were going through a few years back.

Undisclosed money whitening opportunities since July 2020 along with a moderate reduction in registration costs have been helping the companies sell more apartments since the second half of 2020, according to industry people.

And the sustained historic low interest against bank deposits and home loans has further fuelled the demand for housing, with more people opting for owning rather than renting apartments.

Real Estate and Housing Association of Bangladesh (REHAB), said with 1,073 developer companies, the annual market size was Tk58,000 crore in 2019 and the market grew at an average annual rate of 10% over 2019-20 period.

Delta Brac Housing Finance Corporation (DBH), the largest housing financer in the private sector, disbursed 14% more loans during the January-June period of this year over the corresponding period in 2019, while the year-on-year growth rocketed to 141% mainly owing to the one-off dent amid the prolonged general holidays in 2020.