Texaf Q3 FY23: Strong Results; Core Business Unimpacted By Uncertain Macro
During Q3 FY23, Texaf booked €5.8m worth of rental income, up 5.0% YoY while construction of the 2 upcoming projects namely ‘Silikin Village Phase III' (6000.0 sqm of furnished office space) and ‘Promenade des Artistes' (94 apartment units) had progressed without any hinderances. Revenue from Carrigres (sandstone quarry) came in at €2.0m, up 10.0% YoY – while volumes sold were lower on YoY basis, average selling price was 23.0%+ higher (thanks to better product-mix) and thus, more than compensated for the lower volumes. Texaf Digital has completely leased its current office, co-working and meeting room space(s) and ‘OADC Texaf Digital' (joint-venture with the WIOCC Group) will open the first ever tier-3 data centre in the DRC during early FY24. Over the long-term, we believe that Texaf's revenues from its real estate activities will keep rising steadily due to the rental of new developments and an increase in the number of rentable units while over the medium to long-term, initiation of work on the ‘Kinsuka Garden City' project will be a major catalyst for the stock should Texaf be able to partner up with large-scale developers either domestic or international. Added to this, the sandstone quarry should keep benefitting from rising prices and the future infrastructural development to take place in the DRC. We reiterate our BUY rating and €45.0 TP.Texaf SA is a Belgium-based investment company with industrial, real estate and agricultural use in the Democratic Republic of Congo. The Company attracts foreign investors to acquire majority or minority equity investments in the productive sectors, such as infrastructure, agribusiness, energy and finance in order to generate return on investments. In the Real Estate sector the Company has holdings in Anagest, a holding company; Utexafrica, a company offering residences for rent; Immotex and Cotex, both offering offices for rent; Promotex, a property development company and Agence Immobiliere du Fleuve, a real estate services company. In the Agriculture sector the Company has holdings in La Cotonniere and Estagrico. In the Industrial sector it has holdings in Carriaf, a holding company; Carrigres and Congotex. Finally in the Financial sector the Company has holding in i-Finance Holding, a holding company and i-Finance, engaged in micro financing activities.
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