Eastern Housing sees 60% drop in flat sales

The flat sales of Eastern Housing Ltd has been declining continuously due to a downward trend in the real estate sector, with the company reporting around a 60 percent drop in the third quarter of the current financial year.

The figure is obtained from an unaudited financial statement released on Thursday.

During the period, the company earned revenues of only Tk8.99 crore from flat sales, which was Tk22.58 crore during the same time in the previous year.

Besides, the leading real estate company earned the most revenue, Tk32.80 crore, from developing and selling lands.

Seeking anonymity, an official of the company told The Business Standard, "Ready flat business has been in a recession for a couple of years. That has hit our business as well. Now, business is in more trouble because of the coronavirus pandemic."

According to updated data by the Bangladesh Bureau of Statistics (BBS), the real estate sector achieved the highest growth of 16.81 percent during the 2016-17 fiscal year.

"Power shortage, hesitation regarding connectivity of natural gas, high interest rates while borrowing from banks and high property registration costs held the industry back," the Eastern Housing official added.

The real estate sector that is currently enjoying investments of untaxed money only for buying apartments will see the benefit extended to the purchase and development of lands. People have to pay different amounts of taxes ranging from Tk500 to Tk20,000 per square metre depending on the locations of the purchased lands. 

But such scopes have not brought the expected results in the sector so far.

Meanwhile, in the third quarter, total revenue of Eastern Housing fell by 25 percent to Tk41.79 crore. During that period, earnings per share also dropped by 34 percent to Tk0.52.

The third quarter statement reported a 2 percent decline in revenue to Tk224.30 crore. 

In the first three quarters – from July to March – of the current financial year, total revenue dropped by 15 percent to Tk169.83 crore and earnings per share also decreased by 3 percent to Tk2.77.

Meanwhile, the good news for the investors of the company is that it has repaid all loans of several banks.

In the last financial year, the company's earnings per share was Tk3.70 and it paid a 20 percent cash dividend to its shareholders.

Listed on the Dhaka Stock Exchange (DSE) in 1994, the current paid-up capital of the company is Tk93.34 crore.

Sponsors and directors together owned 50.09 percent of shares of the company till February 2020. The institutional and general investors owned 29.62 percent and 20.29 percent of shares respectively.

The closing price of the company's each share was Tk38.70 on Sunday at the DSE. The shares hit the highest price of Tk57.80 each last year.