KPREIT Net Earnings Improves On Rebound in Rental Income

• Owing to increases in rental and other income, as well as a reduction in finance costs, Kingston Properties Limited reported net profit of US$0.93Mn (EPS: $0.20) for the first half of its financial year to June 2021 from the net loss of US$0.34Mn recorded during the same period in 2020.
• Rental income improved by 59.1% aided by the acquisition of two properties in H2 2020 and one in Q1 2021. A recovery in occupancy at some of the company’s properties in the United States and Cayman Islands, that were affected in 2020 by early lockdown measures in those countries, also contributed to the rebound in rental income.
• A $0.26Mn increase in other income due primarily to fair value gain of $0.20Mn from the Group’s investment in a real estate fund, a drop in net finance costs (US$0.47Mn) due to translation gains on cash balances and higher fee income also supported bottom-line growth.
• The company plans to continue to acquire high yielding assets to grow revenues and returns to shareholders. It will continue the divestment of the Florida condo portfolio and shift into multi-family properties to reduce valuation volatility and generate higher yields. It recently acquired 40% interest in a 155-unit multi-family property in Atlanta, Georgia and is in various stages of completion on three value-added and greenfield transactions in the Cayman Islands and Jamaica. While the pandemic persists, management believes that more distressed assets will become available and the company expects to be in a position to take advantage of those opportunities, especially as interest rates remain fairly low keeping funding costs attractive.
• KPREIT’s stock price has appreciated by 30.2% since the start of the year and closed Monday’s trading session at a price of $9.44 per share. At this price, the stock trades at a P/B ratio of 1.5x earnings, which is above the Main Market Real Estate sector average of 1.0x.

Source: (KPREIT Financials)