Slide 1: Balwin Properties Results Presentation for the Six Months Ended 31 August 2024
Your lifestyleour focus BALWIN PROPERTIES RESULTS PRESENTATION FOR THE SIX MONTHS ENDED 31 AUGUST 2024 1
Slide 2: Agenda
AGENDA 1 2 3 Izinga Eco Estate Greenpark Fynbos OPERATIONAL OVERVIEW FINANCIAL OVERVIEW ANNUITIES 4 5 6 Ballito Hills The Polofields De Aan-Zicht SUSTAINABILITY LOOKING FORWARD ANNEXURES Cover image: Munyaka BALWIN PROPERTIES RESULTS PRESENTATION FOR THE SIX MONTHS ENDED 31 AUGUST 2024 2
Slide 3: Operational Overview
1 OPERATIONAL OVERVIEW Steve Brookes Chief Executive Officer THABA-ECO VILLAGE LIFESTYLE CENTRE BALWIN PROPERTIES RESULTS PRESENTATION FOR THE SIX MONTHS ENDED 31 AUGUST 2024 3
Slide 4: Operational Highlights
OPERATIONAL HIGHLIGHTS 640 7.7% 26 404 Apartments sold and recognised in Revenue contribution to the group from Apartments with International EDGE revenue for the period Balwin Annuities certification IZINGA THABA-ECO VILLAGE 49% 42 316 53 Revenue contribution from sale of Apartments in development
Slide 5: Operational Review
OPERATIONAL REVIEW Revenue reduced 28% to R852.7 million compared to the prior comparative period, reflecting the challenging conditions in the residential housing market Total number of apartments handed over amounted to 640 during the period (August 2023: 834 apartments) 49% of revenue recorded fr
Slide 6: Operational Review
OPERATIONAL REVIEW BALWIN PROPERTIES RESULTS PRESENTATION FOR THE SIX MONTHS ENDED 31 AUGUST 2024 6
Slide 7: Development Pipeline
DEVELOPMENT PIPELINE Total apartments in Total apartments Total apartments Total apartments Total apartments sold but Total unsold Development development sold registered recognised in revenue not recognised in revenue apartments Balwin pipeline Gauteng 37 762 8 256 8 049 8 068 188 29 506 29 694 Kwa
Slide 8: Financial Overview
2 FINANCIAL OVERVIEW Jonathan Bigham Chief Financial Officer THE HUNTSMAN BALWIN PROPERTIES RESULTS PRESENTATION FOR THE SIX MONTHS ENDED 31 AUGUST 2024 8
Slide 9: Financial Overview
FINANCIAL OVERVIEW FOR THE SIX MONTHS ENDED 31 AUGUST 2024 R852.7 million 28% 32% 1% R155.1 million 7% R76.9 million 57% Revenue Gross profit margin Operating costs Profit for the period FYNBOS THE REID KIKUYU 16.26 cents 57% R242.8 million Loan-to-value 40.2% 875.05 cents 3% Headline earnings per
Slide 10: Interim Consolidated Statement of Profit and Loss and Other Comprehensive Income
INTERIM CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 31 AUGUST 2024 BALWIN PROPERTIES RESULTS PRESENTATION FOR THE SIX MONTHS ENDED 31 AUGUST 2024 10
Slide 11: Financial Performance: Revenue
FINANCIAL PERFORMANCE FOR THE SIX MONTHS ENDED 31 AUGUST 2024 Revenue Revenue decreased by 28% to R852.7 million (August 2023: R1.2 billion) Revenue earned from the following sources: Revenue from sale of apartments Apartments handed over decreased by 23% to 640 apartments (August 2023: 834 apartmen
Slide 12: Apartments Recognised in Revenue
APARTMENTS RECOGNISED IN REVENUE FOR THE SIX MONTHS ENDED 31 AUGUST 2024 REVENUE BY REGION (%) REVENUE BY COLLECTION (%) BALWIN PROPERTIES RESULTS PRESENTATION FOR THE SIX MONTHS ENDED 31 AUGUST 2024 12
Slide 13: Average Selling Price Analysis
AVERAGE SELLING PRICE ANALYSIS FOR THE SIX MONTHS ENDED 31 AUGUST 2024 APARTMENT CONTRIBUTION BY APARTMENT TYPE Ballito Hills BALWIN PROPERTIES RESULTS PRESENTATION FOR THE SIX MONTHS ENDED 31 AUGUST 2024 13
Slide 14: Average Selling Price Analysis
AVERAGE SELLING PRICE ANALYSIS FOR THE SIX MONTHS ENDED 31 AUGUST 2024 APARTMENT CONTRIBUTION BY APARTMENT TYPE Greenbay BALWIN PROPERTIES RESULTS PRESENTATION FOR THE SIX MONTHS ENDED 31 AUGUST 2024 14
Slide 15: Financial Performance: Revenue from Annuity Businesses
FINANCIAL PERFORMANCE FOR THE SIX MONTHS ENDED 31 AUGUST 2024 Revenue from annuity businesses Revenue increased by 17% to R65.8 million (August 2023: R56.3 million) Annuity revenue grew to 7.7% of group revenue (August 2023: 4.7%) BALWIN PROPERTIES RESULTS PRESENTATION FOR THE SIX MONTHS ENDED 31 AU
Slide 16: Financial Performance: Gross Profit
FINANCIAL PERFORMANCE FOR THE SIX MONTHS ENDED 31 AUGUST 2024 Gross profit Gross profit margin shows a marginal reduction to 32% (August 2023: 33%) Gross profit margin on sale of apartments decreased to 23% (August 2023: 28%) owing to the challenging trading environment Gross profit margin growth re
Slide 17: Financial Performance: Operating Expenses
FINANCIAL PERFORMANCE FOR THE SIX MONTHS ENDED 31 AUGUST 2024 Operating expenses Total operating costs decreased by 7% to R155.1 million (August 2023: R167.1 million) Balwin Properties (company) decreased operating expenses by 7% Balwin Annuities operating expenditure decreased by 8% despite an incr
Slide 18: Financial Performance: Earnings and Dividend
FINANCIAL PERFORMANCE FOR THE SIX MONTHS ENDED 31 AUGUST 2024 Earnings Profit after tax decreased by 57% to R76.9 million 57% decrease in earnings per share to 16.34 cents 57% decrease in headline earnings per share to 16.26 cents Dividend The board resolved not to declare a dividend for the period
Slide 19: Interim Consolidated Statement of Financial Position
INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 AUGUST 2024 BALWIN PROPERTIES RESULTS PRESENTATION FOR THE SIX MONTHS ENDED 31 AUGUST 2024 19
Slide 20: Financial Position: Non-current Assets
FINANCIAL POSITION AS AT 31 AUGUST 2024 Non-current assets Drivers of investment through annuity businesses, namely: – Solar assets – Fibre infrastructure Developments under construction Includes the cost of land, infrastructure, development rights and construction costs Increased by R193.4 million
Slide 21: Financial Position: Developments under Construction
FINANCIAL POSITION AS AT 31 AUGUST 2024 Developments under construction (continued) BALWIN PROPERTIES RESULTS PRESENTATION FOR THE SIX MONTHS ENDED 31 AUGUST 2024 21
Slide 22: Financial Position: Developments under Construction (continued)
FINANCIAL POSITION AS AT 31 AUGUST 2024 Developments under construction (continued) Increase driven by top-structure development costs reflecting the focus of developing the existing pipeline Costs incurred in preparation for busier handovers in the second half of the year supported by pre-sales and
Slide 23: Financial Position: Receivables and Cash
FINANCIAL POSITION AS AT 31 AUGUST 2024 Trade receivables Mostly apartments handed over but not registered at period end Cash and cash equivalents Cash position at period end of R242.8 million (February 2024: R289.6 million) Cash on hand exceeds funding covenants and board thresholds Continued activ
Slide 24: Financial Position: Funding
FINANCIAL POSITION AS AT 31AUGUST 2024 Funding Development loans and facilities amounted to R3.1 billion (February 2024: R3.1 billion) Marginal reduction in loan-to-value to 40.2% (February 2024: 40.5%) – covenant at 50% Loan-to-value ratio is materially measured at cost and free from fair value adj
Slide 25: Funding Overview
FUNDING OVERVIEW Unaudited as at Audited as at 31 August 2024 29 February 2024 R '000 R '000 General banking and investment facility 1 117 967 1 038 603 Land 1 148 836 1 183 061 Top structure 339 361 412 452 Common costs 45 147 71 279 Infrastructure 418 927 367 503 Total 3 070 238 3 072 897 Loan-to-
Slide 26: Interim Consolidated Statement of Cash Flows
INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 31 AUGUST 2024 BALWIN PROPERTIES RESULTS PRESENTATION FOR THE SIX MONTHS ENDED 31 AUGUST 2024 26
Slide 27: Annuities
3 ANNUITIES Raaziq Ismail Head of Legal and Annuity THE REID BALWIN PROPERTIES RESULTS PRESENTATION FOR THE SIX MONTHS ENDED 31 AUGUST 2024 27
Slide 28: Annuities Overview
ANNUITIES OVERVIEW R26.9 million* R45.6 million 9 599 Operating profit Savings to our clients through Active clients on Balwin Fibre network Balwin Mortgages BALLITO HILLS 1 446 931 R1.06 billion Tons of carbon dioxide emissions Balwin Connect Clients (Internet Service Assets under management as at
Slide 29: Annuity Businesses Statement of Profit and Loss
CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 AUGUST 2024 Fibre and Other 31 August 24 31 August 23 Unaudited (R’000) * Connect1 Rentals 2 Mortgages Green Living 3 Businesses4 Annuity Annuity Revenue 32 814 8 801 5 141 7 212 20 570 74 538 67 191 Cost
Slide 30: Balwin Fibre Statement of Profit and Loss
BALWIN FIBRE (PTY) LTD – STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 AUGUST 2024 31 August 24 31 August 23 OPERATIONAL UPDATE Unaudited Unaudited Financial update R’000 R’000 Homes passed 13 304 Revenue 31 300 26 031 Active clients 9 599 Cost of sales - - Uptake
Slide 31: Balwin Mortgages Statement of Profit and Loss
BALWIN MORTGAGES (PTY) LTD – STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 AUGUST 2024 OPERATIONAL UPDATE 31 August 24 31 August 23 Unaudited Unaudited 699 bonds secured for the period 1 March 2024 – Financial update R’000 R’000 31 August 2024 Revenue 5 141 6 271
Slide 32: Balwin Green Living Statement of Profit and Loss
BALWIN GREEN LIVING (PTY) LTD – STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 AUGUST 2024 31 August 24 31 August 23 OPERATIONAL UPDATE Unaudited Unaudited Operating on 11 sites Financial update R’000 R’000 Revenue 7 212 2 305 A 10% discount on electricity tariff t
Slide 33: Balwin Rentals Statement of Profit and Loss
BALWIN RENTALS (PTY) LTD – STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 AUGUST 2024 31 August 24 31 August 23 OPERATIONAL UPDATE Unaudited Unaudited Financial update R’000 R’000 Achieved an average occupancy of 97% for the period with a low of 94% and a high of 1
Slide 34: Other Annuity Businesses Statement of Profit and Loss
OTHER ANNUITY BUSINESSES STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 AUGUST 2024 31 August 24 31 August 23 OPERATIONAL UPDATE Unaudited Unaudited Financial update R’000 R’000 Other businesses comprises of Revenue 20 570 24 218 Approved Cost of sales (1 458) - Co
Slide 35: Sustainability
4 SUSTAINABILITY Steve Brookes Chief Executive Officer GREENCREEK BALWIN PROPERTIES RESULTS PRESENTATION FOR THE SIX MONTHS ENDED 31 AUGUST 2024 35
Slide 36: Sustainable Business Practices
SUSTAINABLE BUSINESS PRACTICES Continued commitment to reducing our environmental impact through innovation in design and building techniques The first South African company to have both a science-based target and Net Zero commitment approved by the International Science Based Target Initiative All
Slide 37: Looking Forward
5 LOOKING FORWARD Steve Brookes Chief Executive Officer THE BLYDE MINT RESORT BALWIN PROPERTIES RESULTS PRESENTATION FOR THE SIX MONTHS ENDED 31 AUGUST 2024 37
Slide 38: The Future
THE FUTURE Maintain focus on core operations by leveraging existing land bank and existing pipeline of developments Opportunities for growth in strategic areas on terms that do not put liquidity and debt pressure on the group Healthy position of forward sold apartments of 743 Key focus on cost reduc
Slide 39: Annexures
6 ANNEXURES THABA-ECO VILLAGE BALWIN PROPERTIES RESULTS PRESENTATION FOR THE SIX MONTHS ENDED 31 AUGUST 2024 39
Slide 40: Operating Model
OPERATING MODEL Development of large-scale residential estates in key target nodes Targeting an average profit margin of low to mid 30% range over the lifecycle of each project Drive efficiencies through turnkey approach to development Maintaining costs and cash preservation MUNYAKA Development pipe
Slide 41: Turnkey Development Model
TURNKEY DEVELOPMENT MODEL THE HUNTSMAN MUNYAKA DE AAN-ZICHT BALWIN PROPERTIES RESULTS PRESENTATION FOR THE SIX MONTHS ENDED 31 AUGUST 2024 41
Slide 42: Corporate Overview
CORPORATE OVERVIEW Specialist, national residential property developer of large- scale sectional title estates Focus on high quality, environmentally efficient, affordable apartments with an innovative and all inclusive lifestyle offering for clients Currently developing approximately 2 000 apartmen
Slide 43: Governance Process: Development Opportunities
GOVERNANCE PROCESS DEVELOPMENT OPPORTUNITIES Development opportunities identified Internal due diligence process followed: › Costs › Infrastructure › Zoning › Independent review of nodal residential demand Presented for approval to: MOOIKLOOF ECO-ESTATE › Executive Committee › Transactions Committee
Slide 44: Investment Case
INVESTMENT CASE Well positioned to address the undersupply of quality, affordable housing in the low to middle market income market Long-term development pipeline in key strategic locations Proven and flexible business model for large-scale developments Strong management with approximately 30-years
Slide 45: Development Brands
DEVELOPMENT BRANDS Core development model One-, two-, and three-bedroom four storey walk up apartments Prices range from R719 910 to R2 899 900 Developments located in high density, high growth nodes across key metropolitan areas Benefits from economies of scale, in-house construction THE BLYDE and
Slide 46: Development Brands
DEVELOPMENT BRANDS Model targets a slightly lower income consumer than the Classic Collection Prices range from R599 900 to R1 519 900 Developed on a phase-by-phase approach Distinctive architecture and high-quality standards Residents have access to traditional lifestyle offerings associated with B
Slide 47: Development Brands
DEVELOPMENT BRANDS Three elite model developments, The Polofields and Munyaka Lifestyle Centre apartments (Johannesburg, Waterfall) and Izinga Eco Estate (KwaZulu-Natal, Umhlanga) Apartments built to higher specifications with luxurious finishes Prices range from R899 900 to R10 999 900 Developments