DURBAN – Listed investment group Trematon Capital yesterday reported a 76.21 percent decline in profits to R5.9 million for the six months to end February, negatively impacted by impairments and increased operating costs.

The group said an accounting loss was realised on the sale of a joint venture within Resi, which owned a residential complex in Sanddrift in Cape Town.

It said an impairment was also raised on the investment in Cloudberry Investments, which holds shares in Mazor Group as well as an unrealised loss of R4.2m recognised on the mark-to-market fair value adjustment of an interest rate swop within Aria.

“Increased operating costs were also experienced within Generation Education that relate directly to the Imhoff campus, which was opened in January 2019. The operating costs increased with the school appointing additional staff before the school opening,” the group said.

The group operates mainly in South Africa, with most of its investments based in the Western Cape. Its investment portfolio consists of Club Mykonos, Aria Property Group, Mykonos Casino, Generation Education and Resi Investment Group. It reported R24.81m in profits last year.

Yesterday Trematon said its revenue increased 29.1 percent to R198.80m, up from R154m while operating profit declined to R58.4m, down from R62.9m compared to last year.

The group reported diluted loss a share of 0.1 cent a share compared to last year’s diluted earnings per share of 6.6c a share.

The group’s intrinsic net asset value (INAV) increased to 482c during the period from 468c in August 2018, due to realisations of mature assets in Aria Property Group. INAV was the primary measure of shareholder value in the group as the INAV is the directors’ best estimate of the true underlying value of the group.

Trematon, however, said it was bullish about the year ahead after it entered into a new venture called Balwin Rentals, with an effective interest of 22.5 percent, together with Buffet Investments, KLT Holdings and Balwin Properties to acquire residential units specifically built by Balwin Properties for the rental market.

“The investment has a guaranteed initial net rental yield of 10.5 percent with annual escalations of 3 percent,” the group said. “The first tranche of 156 units to the value of R98m was transferred in December 2018 and is fully let.”

The group said the created venture was firmly positioned for growth in the future as it had already entered into a first right of refusal with Balwin Properties to purchase a further 4544 units in the next few years with an estimated value of R5 billion.

Trematon rose 2.47percent on the JSE on Monday to close at R2.90.