Founder: Turnaround Talk
The Energy Crisis is one of the biggest challenges that South Africa is currently facing. Turnaround Talk has published a number of articles detailing the financial impact of loadshedding, and we are already into our third month of continuous loadshedding. If this trajectory continues, we may be on track to break the record set in 2022 where we had 200 days of loadshedding (which amounted to 1 900 hours – or 79 days of total blackouts- when all of the hours were added together).
South Africans have been at pains to address this challenge. With the cost-of-living crisis increasing, it is becoming increasingly unsustainable to turn to generators as an alternative power source. Solar is becoming more popular, with many businesses and residential properties going green.
Balwin Properties has taken the bold step to include solar on all of its properties.
Driving solar
The BusinessTech article points out that Balwin Properties says that it is driving solar, generators – and soon battery backup solutions – at its active developments in South Africa, as these features have become practically non-negotiable for home buyers in the country.
In a trading update to investors on Friday (17 March), Balwin said that it anticipates strong growth in earnings for the year ended February 2023, expecting a boost in consolidated headline earnings per share of between 16% and 21% over the prior corresponding period.
This would translate into an increase from the prior financial year’s 75.88 cents to a range of between 88.0 and 91.8 cents per share, the group said.
The article adds that, despite recognising fewer apartments in the year compared to the previous year (2,780 versus 2,962), the property developer expects both revenue and gross profit margin to increase over the prior financial year.
Balwin said that its emphasis on energy efficiency, green living and mitigation tools for the country’s prevailing energy crisis is resonating with the market and in turn, driving sales.
“Balwin’s drive towards energy efficiency and green living, whilst not only environmentally responsible, is proving to be financially rewarding for the group and assists in mitigating the large increases being experienced by our clients in the cost of utilities and higher interest rates,” it said.
“In response to the macroeconomic environment, management has introduced compelling sales incentives for home buyers and investors, which have already shown encouraging results. This includes incentives for first-time homeowners, a CEO Loyalty Program, a referral fee, and a planned rental guarantee for investors.”
Image By: Image By: Maria Godfrida via Pixabay
Investing in green innovations
The article points out that the group said that is continuing to invest in various green innovations, including the installation of solar energy solutions at all of its active developments.
“Energy security is an ongoing national crisis, and management is implementing various solutions to address this, ranging from the installation of generators at some of our developments to battery backup solutions,” it said.
The first battery backup solution is planned to go live in April at The Reid, Linbro Park.
The article adds that, regionally, the group said that trends continue to favour the coastal regions, especially the Western Cape, where demand remains resilient. However, Gauteng remains the group’s most significant revenue contributor, although this has been reduced by strong performances from the Western Cape and KwaZulu-Natal regions.
Continued increase
The article points out that developments under construction continued to increase on the back of ongoing strategic investments in its development pipeline. These primarily relate to infrastructure investment at Mooikloof Smart City (Pretoria East) and the recently launched lifestyle centre and lagoon at Munyaka (Waterfall City, Johannesburg).
Image By: Tidal Electrical Services
Despite the positive results, the group cautioned that the outlook for the country and the property sector remains strained.
The article adds that the group said it anticipates margin pressure for at least the first half of the current financial year, considering the weak macroeconomic outlook, lower consumer spending, the ongoing impact of load-shedding and the need to adapt selling prices where appropriate to support the required sales volumes.
However, the continued rollout and monetisation of solar energy installations at all of its developments is one of the key ways it intends to mitigate this, it said.
This is just another example of a company embracing agility to address a current challenge. This will only benefit them in the long run.
