CEIBA Investments (CBA), the real estate company focused on Cuba, has reported a slight increase in its net asset value (NAV) in full year results to the end of December 2019.
The company, which owns four hotels and an office complex in the Caribbean island, saw its NAV per share increase to $1.50 from $1.49 in 2018. In sterling terms, the NAV fell 2.7% to 114.5p per share.
Meanwhile, earnings per share for 2019 jump to 4.2p from 1.2p in 2018.
The company announced earlier in April that the impact of covid-19 on its portfolio had meant it would not pay a dividend for 2019. Its hotel assets have closed due to a lockdown in Cuba.
Its office complex, Miramar Trade Center, has been less affected, it said, but the uncertainty cause by the pandemic was behind its decision.
Cuba had seen a drop off in tourist during 2019 as the US escalated sanctions on the country including restricting US citizens from travelling to Cuba and enabling lawsuits to be filed against enterprises doing business in Cuba on “confiscated” property.
This had a big impact on CBA’s hotel assets, which recorded similar occupation levels to 2018 but at reduced rates.
In contrast, the Miramar Trade Center recorded its best year ever with net income of $13.5m.
[The covid-19 pandemic has obviously had a huge impact on the hotel sector and CBA’s assets are no exception. Covid-19 aside, there are reasons to be optimist in the long-term growth prospect of CBA, however. The US-Cuban relations that have escalated under Donald Trump’s administration could be reversed following the US presidential election later this year. Joe Biden, the likely Democrat candidate, was supportive of the easing of embargoes on Cuba during Barack Obama’s administration and his election could trigger a U-turn in policy. Tourism in Cuba had been booming in the later years of Obama’s presidency and provides a positive measure of the potential upside if relations with the US improve.]