Trustco founder and MD Quinton van Rooyen. Picture: RUSSELL ROBERTS
Trustco founder and MD Quinton van Rooyen. Picture: RUSSELL ROBERTS

Namibian investment company Trustco says profit after tax more than doubled in the year to end-March thanks in part to a decision not to develop certain properties.

“The group’s diversified business model, both in revenue streams, geographical regions and asset spread again proved its worth,” Trustco said on Thursday.

The company, which has financial services and mining interests, said consolidated revenue increased by 85% to N$1.5bn (R1.5bn), with profit after tax surging 165% to N$725m.

Revenue was boosted by a N$984.4m “transfer of inventory to investment property” gain. This was linked to a decision not to develop properties that were previously bought for that purpose, which meant the group reclassified those properties from “inventory” to “investment property”.

Meanwhile, net profit was boosted by an income tax benefit of N$119.1m, compared to a gain of N$32m the previous year.

The company also recorded a loan-waiver gain of N$545.6m.

Next Investments, which belongs to the family of Trustco founder, CEO and major shareholder Quinton van Rooyen, waived the facility. This meant the group was “legally released from its contractual obligation to settle the loan, and the financial liability was derecognised”.

“Owing to the fact that there was no consideration paid by the group, nor equity instruments issued by the group in exchange for this release of debt, the gain has been recognised in as was [sic] released to profit or loss,” Trustco said.

Trustco said revenue from its 80%-owned insurance business rose 241% to N$1.3bn. Profit after tax nearly doubled to N$292m.

The resources segment, whose assets include Meya Mining, Northern Namibia Development Company and Morse Investment, grew after-tax profit to N$486m, from N$139m.

“At the time of reporting, an offer was made for a diamond asset, two copper assets are being evaluated, and one zinc asset has been identified. These assets are all located in Namibia,” Trustco said.

The banking and finance segment “continued its upward trajectory”, with profit after tax of N$262m, compared to a loss after tax of N$52m previously.

Trustco, which said it would not pay a dividend, said it had “further broadened its lender and capital base”.

The restructuring of its debt with the international lenders has been “partially completed, with transactions concluded with five of the 11lenders”.

“The group is confident that the remaining international debt will be successfully restructured as the lenders indicated their willingness to conclude the restructuring process when the standstill agreement expires on June 15 2019.”

hedleyn@businesslive.co.za