Real estate developer JS Land Plc, listed on the Cambodia Securities Exchange (CSX) Growth Board, reported a total global loss of 2.363 billion riels ($590,750) in the first half ended June 30, 2022 due to weak demand. condominium units.
In its Aug. 31 filing, JS Land showed no revenue for the period as it did not hand over its Garden Residency 2 (GR2) project, which is currently under construction and expected to be completed in 2023.
JS Land Chairman Koy Le San told shareholders that as a real estate development company, the terms and conditions stipulated in the sale and purchase agreement allow the company to recognize revenue once the property is completed and delivered.
This, he said, was in line with the requirements of international reporting standards.
“Thus, between now and the delivery of the GR2, our company’s audited account will not reflect any turnover. Nonetheless, you will see the company’s real estate development assets increase on a quarterly basis to reflect the progress of the project to date,” added Le San.
For the second quarter ended June 30, 2022, JS Land posted a net loss of 744.141 million riels.
Revenue for the company, which raised $12 million in its February IPO, comes from the sale of condominium units and other revenue.
In a statement, the firm noted that the current situation of “apparent oversupply of condominiums” could lead to “a real estate overhang or unsold properties” as well as downward pressure on the price of its current development project. This, he said, is likely to “negatively” affect its sales and profitability.
“We seek to reduce the risk of holding unsold properties by launching pre-sale events to attract early buyers with attractive sale prices and payment options.
“We believe that our various payment system options not only help attract buyer interest, but also reduce the cancellation rate that [could] help reduce the risk of real estate overhang,” said JS Land.
In addition, the company indicated that before acquiring and developing a land bank, the company conducts a feasibility study to determine the potential demand for properties considering market supply and demand, budget and estimated construction costs, comparable projects, potential price of properties, existing and/or potential competitors developing near the site.
At the close, JS Land remained unchanged at 3,890 riels for a market capitalization of 100.01 billion riels.