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South African real estate investment fund, Rebosis Property Fund, has opted not to pay dividends to shareholders at the end of its 2021 financial year.
The decision not to reward shareholders makes it the third consecutive year that the South African property fund’s board has decided to conserve its cash holdings.
The move aligns with its plans to conserve cash and retained earnings, as it takes on strategies to reduce its credit risk and debt portfolio, which continue to impact the fund’s performance.
Rebosis Property Fund is a Black-owned real estate investment trust that owns and manages retail and office buildings in Gauteng and the Eastern Cape in South Africa.
The fund operates under the Billion Group, an award-winning Black-owned property development and investment group founded by South African multimillionaire property developer Sisa Ngebulana.
At the end of its 2021 financial year, Rebosis reported R29.41 million in losses attributable to its owners, as the increasing interest rate cycle, load shedding and unsustainable municipal service charges continued to pressure its financial performance.
Its financial results were also weakened by disruptions in its operating environment, as the impact of the COVID-19 pandemic and continuing market uncertainty around the economic repercussions of the Omicron variant at the time of writing raised concerns about future earnings.
During the review period, Rebosis’ losses attributable to owners narrowed from R109 million in 2020 to R29.41 million in 2021, despite the drop in its operating income from R908.4 million to R706.3 million.
During the year under review, its revenue also declined from R1.71 billion to R1.67 billion.
As a result of its performance for the year, the board deemed it prudent to deleverage the fund and resolved not to declare a full-year dividend — the third consecutive year the group has opted not to do so.
In line with its strategy to deleverage and optimize its balance sheet by reducing the loan-to-value rate and restructuring the business as a retail-focused fund, Rebosis announced a R6.3-billion office portfolio disposal.
After the transaction, the company expects to resume dividend payments to shareholders on the condition of a favorable operating environment.
