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Habesha Construction Materials and Development S.C registered over 5 million birr net profit in four months operation from May-June, 2012.
At the 2nd regular general assembly of shareholders, the company held on Saturday December 8, 2012 at the Hilton Addis, the Board of Directors presented the company’s annual report for shareholders.
This profit was registered in four months amid several challenges the company faced including, the financial sector being unwelcoming for the real estate industry, land acquiring being inapt and laggard, public service providers being slow in responding to the company’s queries, and shareholders failing to pay their contribution to their shares, the report read.
The company has registered a 16.6 million birr gross /total income from construction. The income the company gained from constructions on land leased from the government is just 3.3 million birr. The rest 13.3 million birr income is from joint venture (JV).
Habesha Construction has spent 6.9 million birr over the last year. The company’s profit before tax of 7.8 million birr is equivalent to 25 percent of its paid up capital. Its net profit after tax was 5.3 million birr. Some 175,647 of this profit is gained from interest from deposits in the bank.
Dividend per share after the company pays out due taxes represent 15.8 percent. Shareholders, who bought shares until the company started operation in April 2012, would get up to five percent interest, increasing their income to 20.8 percent.
Meanwhile, the board on the general assembly recommended shareholders not to withdraw their dividend so as to augment the company’s capital. “You can take it anytime you want as you might have your own plans and priorities. But it would enable our company to undertake more projects if the five million birr net profit could be reinvested into the capital”, Eskinder Desta, Chairman of the Board of Directors of the company said. Hence, if shareholders do not voice their interest in fifteen days time, it would be understood that they have accepted the proposal and leave the money for the company’s capital. Shareholders Capital spoke to said they would agree with the board’s proposal.
Established in July 2009, the company floated shares 14 months after its establishment. Share sales; however, was not as much as the founders’ expectations as many other shares were floated around the same time, according to the report. It managed to sell out 46,576 shares to 2080 shareholders until June 2012, securing 46.6 million birr. Habesha Construction is a company with 31.9 million birr paid up capital.
The company is also to float shares worth 50 million birr to increase the capital to 100 million birr, according to Eskinder. “Currently its subscribed capital stands at 46 million birr which is due to increase to 50 million when shareholders increase their share”.
Over the last fiscal year, the company has sold out 349 houses for residence and 25 houses for commercial use. Over 49 percent of their construction on average is finalized, at cost of 386.4 million birr, out of which the company collected 24 percent which is 95.6 million birr. The house demand country wide currently is expected to reach one million and is likely to grow in 100,000 every year.