Eastern Housing posts record profits as property value soars

Easter Housing Ltd (EHL), the lone publicly traded realtor of the country, has made a record profit in 2021-22 fiscal year by realising higher gains amid the recent rises in property prices, according to the realtor's latest price sensitive information.  

The company's net profit after taxes rose 47.6% to Tk54.9 crore in the fiscal year that ended on 30 June 2022. Its annual earnings per share (EPS) increased to Tk5.88, from the previous year's EPS of Tk3.98.

Upon requests for a comment on the annual performance, EHL's Company Secretary Salim Ahmed asked to wait until the directors' report is published in a few days.

A senior official of the company, however, attributed the record profits to the company's higher turnover with increased realised gains because of the soaring prices of new apartments by a double-digit rate, and construction materials in the last fiscal.

In the July to March period of FY22, the company secured a revenue of Tk254 crore, which was Tk145 crore over the same period of the previous year.

An over Tk100 crore EHL project in the capital's Gulshan area was sold in no time to a single buyer in the last fiscal year, while such an apartment building usually takes much longer to be sold.

The company realised a handsome gain in the project's land value, along with the fact that the construction cost was fairly lower than its selling price.

The project alone helped increase the contribution of flat sales in EHL's revenue in the first nine months of FY22 to 49% from 29% in the previous fiscal year.

Following the hard times in the 2019-20 and 2020-21 fiscal years, collection from customers also rebounded in the 2021-22 fiscal year that helped the company's business improve, according to the official who is not allowed to talk to the media.

EHL, founded by legendary entrepreneur Jahurul Islam, began its journey in 1964 with a residential area development project at Pallabi, Dhaka and now it is engaged in both land development and apartment businesses.

Following the successful turnover of the first phase of Jahurul Islam City in the capital's Aftabnagar area, the company is extending to the second and third phases.

Equity analysts said the upward trend in the property prices is helping EHL's inventory value to go up. At the end of last March, its Tk1,337 crore inventories included undeveloped land worth Tk286 crore, work in progress valued at Tk610 crore, ready for sale inventory worth Tk440 crore, and construction material worth Tk10 crore.  

Analysts also are cautiously observing the company's moves regarding continuing construction work despite the sharp inflation in steel and other material prices.

Since the first wave of the pandemic, construction rod prices jumped by 35%-45% in Bangladesh that forced a large number of commercial building projects to go slow.

The EHL official, who talked to The Business Standard on condition of anonymity, said the company is cautiously advancing in construction work as abnormal construction costs nowadays might hurt its profitability in future if the material price and property market cools down.

Aiming at a stronger future, the company nowadays is more serious in land acquisition for future projects, he added.

The EHL board of directors on Thursday recommended a 20% cash dividend for FY22.

On 30 June this year, the company's net asset value per share stood at Tk 74.21.

Its shares, having a face value of Tk10 each, closed at Tk79.6 in the Dhaka Stock Exchange on Thursday.