Lahore, April 14, 2022 (PPI-OT):The grading denotes prospects of execution of the real estate project as per plan and the ability to transfer the possession as per defined terms. The Project “Oasis Park Residencia” is first venture of the BRB Properties started in FY18 and will be completed in June’25 as per agreed terms with Sindh Building Control Authority (SBCA). The company has shown significant progress towards the construction of bungalows with management’s commitment to complete it before the deadline. The business profile of the Project is improving as the Project is gaining attraction from the community.
As of March 2022, the Company has already sold 80% of bungalows while the company plans to benefit from price appreciation of the remaining units. The Company is expecting rise in the saleable values, the average price of each bungalow is around PKR 23-27mln. In 1HFY22 the company recorded revenue of PKR ~468mln (FY21: PKR 990mln). FCFO stood at PKR 13mln in absolute terms.
The financial risk profile remains subject to mobilization of customer advances. BRB Properties has fully utilized the facility of PKR 500mln from Meezan Bank Ltd under Musharaka agreement at KIBOR plus 250bps. The repayment is due from March 2022 on a quarterly basis. The case relating to tax liability amounting to PKR 25.2mln has been referred to Chairman FBR by the Sindh High Court.
The courts interim order of no coercive action against the petitioners holds to continue till the matter is decided by FBR. The land bank left from the residential Project would provide strength to the developer. The corporate structure of the developer is aligned with the assigned grading. The grading is dependent on management’s ability to complete the Project within defined parameters, any material deviation in plan, impacting risk profile of the company, will be negative.
For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com