Shelter Afrique, a pan-African housing development financier, has reported an operating profit of US$ 1.04 million, up from an operating loss of US$ 0.58 million in 2020, thanks to impairment recoveries and excellent cost control efforts.
The Company’s operational expenses were $8.04 million in 2021, down from $8.44 million in 2020, showing a 10% decrease. It also reduced operational expenses, which fell from $8.35 million in 2020 to $7.71 million in 2021.
However, the Company’s gross income fell marginally to US$12.09 in 2021, down from US$13.94 in 2020.
Shelter Afrique Chairman Mr. Ephraim Bichetero told Shareholders during the 41st Annual General Meeting in Victoria Falls, Zimbabwe, that the Company’s transformational initiatives and economic resilience helped it to weather the COVID storm.
“Shelter Afrique’s dedication to returning to full financial sustainability, one of the Company’s three strategic goals, together with Enhancing Shareholder Value & Development Impact and Organizational Sustainability, is reflected in this profit. I’d want to thank the board, management, and personnel for their ongoing efforts to achieve the targeted results ahead of schedule “Mr. Bichetero explained.
The AGM which kicked off on July 25 under the theme: Climate Change and the Built Environment, in referenceto the Glasgow Conference of Parties (COP26), will close on July 30.
In the 2019-2023 Strategic Plan, the Company projected a return to financial viability by 2020 and overall financial sustainability and profitability by 2023, a feat that it achieved two years ahead of schedule.
“Our 2021 financial performance, despite the macroeconomic and socio-political environment, is an indication that the turnaround plan recommended by the board and approved by shareholders continues to be the north-star on our course to returning to financial stability and viability. As management, we are encouraged by this and look forward to the challenge of the coming years,” said Shelter Afrique Group Ag. Managing Director and Kingsley Muwowo.
During the year under review, total assets declined by 5 per cent from US$ 176.68 million in 2020 to US$ 167.31 Million in 2021, attributed to the 100 per cent reduction in settlement of the total debt following the repayment of US$ 34.71 Million.
Liquidity decreased by 33% percent from US$ 47.41 million in 2020 to US$ 31.59 million in 2021, attributed to significant debt servicing payments on the CFA Bond and DRA debt amounting to US$ 35.87 million. However, the liquidity ratio still remained strong, closing at 19 per cent, which is 4 per cent points above the minimum threshold of 15 per cent.
Shareholder Funds increased by 19 per cent from US$135.74Million in 2020 to US$ 161.60 Million in 2021 due to the new capital subscriptions of US$24.85 million and the profit of US$ 1.04 Million for the year. This increase brings the total paid-up capital by 15 per cent, from US$ 157.29 million in 2020 to US$ 182.14 million in 2021.
“We are grateful to our shareholders for their unwavering support through the continued capitalisation of the Company, with US$ 24 million received in 2021 against a target of US$ 17 million. The receipt of these funds was achieved amidst severe fiscal constraints, and we are conscious of this,” Mr. Muwowo said.
Mr. Muwowo added that the Company would continue to review various capital raising options, including new equity capital and debt options through the issuance of local currency bonds to develop and deepen Africa’s capital markets.
“We recently completed a debut ₦46 billion (US$110.7 million) Series 1 Fixed Rate Senior Unsecured Bond Issuance in Nigeria’s capital market under its ₦200 billion (US$481.3 million) bond issuance programme for housing and urban development in Nigeria. We plan similar bond issuance in East African markets including Kenya, Uganda, Tanzania and Rwanda,” Mr. Muwowo said.
New Managing Director
Meanwhile, Shelter Afrique shareholders have approved the appointment of Thierno-Habib Hann as the company’s new Managing Director. Mr. Hann will replace Mr. Andrew Chimphondah who left the company in February.
Mr. Hann has extensive international experience in housing finance, capital markets and structured finance, set-up and management of investment funds with banking and multilateral institutions. Currently, he is the Asia-Pacific Lead for housing finance & capital markets at the International Finance Corporation (IFC), based in Bangkok and previously in charge of Africa and the Middle East, based in Nairobi.
“The process was very competitive, and Mr. Hann was selected based on merit and competence. He is expected to strengthen governance, be an embodiment of our values and drive the investment strategy of the Company focused on delivering large-scale affordable housing,” Mr. Bichetero said.
Mr. Hann will join the organization once he completes his current contract with the International Finance Corporation. In the interim Mr. Muwowo will continue to serve as Acting Managing Director