Dear Colleagues, Board, and Committee Members
I wish you and your loved ones a Happy and Prosperous New Year.
2019 was marked by growing uncertainties. Nigeria remained an oil-dependent nation, growth in real GDP under-performed potential GDP.
Nigeria’s Gross Domestic Product (GDP)grew to 2.3 percent year-on-year in 2019 (4th Qtr). Average growth in 2019: 2.2% vs Average Growth in 2018: 1.9%.
The marginal growth recorded resulted from growth in oil output in 2019; stability in the adoption of macroeconomic variables by managers of the Economy and increased consumer demand in Qtr 4.
Though the Nigerian Real Estate sector exited recession in the 1st quarter of 2019, recording a growth of 0.93 percent, the growth was however not sustainable, and dipped to -3.84 percent in Qtr 2, closing at -2.0 percent in Qtr 4 of 2019.
Afriland Properties Plc achieved 70% of budgeted profit before tax (PBT), we however recorded a 30% increase on 2018 actual PBT.
The following income streams account for the 30% shortfall against 2019 PBT budget:
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- Properties earmarked for sale, yet to be sold (N69mn)
- Build to sell properties, yet to be built(N292mn)
- Build to rent on proprietary properties (N45mn)
- Project Directorate Management fee (N207mn)
2019 was indeed a tough year, but despite the challenging economic climate, we maximized available revenue streams and our performance yet again, showed hard work, commitment and perseverance on all sides and most importantly, the grace of God.
What does 2020 have in store for us?
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- Growth will most likely remain unchanged at 2%, well below the expected growth potential of 3.1%.
- Inflation Rate will average off at 11.3%, driven by border closure, infrastructure deficit; VAT increase from 5% to 7.5%.
- Hopefully, improvement in investor confidence and policies that will boost growth by stimulating lending to the real sector.
- Demand for commercial spaces could weaken if Economy remain slow.
- Recovery in the RE Sector dependent on lower borrowing costs; improved security and improved traffic management.
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Consequently, we must all be ready to think and act, radically. The Year 2020 cannot be BAU (Business As Usual).
To achieve sustainable growth and increased corporate value we need to embrace the following:
Innovation, more Innovation and even more Innovation
For us to continue to stay relevant, we must build upon the innovative trends kicked off in 2019 by implementing majority of the strategic initiatives identified.. These innovations will lead to significant blue ocean opportunities that are vital to our Company’s long-term survival.
Be part of the bigger picture
Align responsibilities, goals and purpose. Fully understand how each of your goals connect to the larger objectives of the organization. Identify with the Company’s purpose of improving lives by investing in the development, management and maintenance of world-class Real Estate offerings across Africa.
The 3 Es
Execution, Enterprise and Excellence; These are the fundamental values of our organization and they should continue to reflect in all that we do.
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- Execution – a burning desire to always see things through to completion in a timely, efficient and effective manner.
- Enterprise – having the willingness and determination to do whatever it takes to get the job done.
- Excellence – delivering in an outstanding manner, consistently.
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In 2020, we will focus on the renewed vision on how best to serve our customers, new products, new revenue streams, in a bid to increasing shareholder value for all stakeholders.
Thank you all for 2019 and welcome to 2020! I look forward to the start of an amazing decade with the most amazing team.
God bless us all.
Uzo Oshogwe