Harbor Custom Development Inc. (NASDAQ:HCDI) said that the company posted record revenue for the first half of the year and expects the construction of several of its multi-family projects to be completed by the end of the year.
For the six months ended June 30, 2022, the Tacoma, Washington-based real estate company involved in all aspects of the land development cycle, reported sales of $38.9 million, compared to $28 million in the first half of 2021.
The company logged a gross profit of $4.1 million during the first half of the year, compared to $3.9 million in the comparable period a year earlier.
READ: Harbor Custom Development announces $5.4M sale of land tracts in Blaine, Washington to Noffke Landholdings
During the first half of 2022, Harbor reported an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $0.9 million, compared to adjusted EBITDA of $2.5 million in the same year-ago period.
For the second quarter ended June 30, 2022, Harbor reported sales of $10.3 million, compared to $14.1 million in 2Q 2021. The company explained that the dip was largely due to a decrease in entitled land sales of $9.3 million, primarily offset by an increase in home sales of $5.3 million.
Harbor reported a net loss of $4.5 million, or loss per share of $0.46 for the 2Q, compared to a net income of $1.1 million, or earnings per share of $0.06 for the comparable quarter a year earlier.
The firm noted said that its fee build cost overruns were primarily due to inflation and record setting rainfall in western Washington.
In a statement accompanying the numbers, Harbor Custom CEO Sterling Griffin said: “Despite results coming in below expectations, our team maintained a strong level of execution with the construction of our multi-family projects during the second quarter.”
He added: “Significant cost overruns for our fee build projects, the cancelation of a key land sale previously under contract, and delays in the closing of other home and lot sales due to changing market conditions contributed to underperformance in the second quarter.”
However, Griffin noted that despite the second quarter’s results, the company achieved record revenues through the first six months of 2022.
“We expect the construction of several of our multi-family projects to be completed by the end of the year, and our first project, Mills Crossing, is scheduled to be fully rented in the fourth quarter. Additionally, we expect to start renting other multi-family projects in the third and fourth quarters as the projects near completion,” added Griffin.
“We have substantially completed the hiring of additional members of our team to support our public company infrastructure and prepare us for the expected growth in our multi-family division.”
Meanwhile, Harbor said its full year 2022 revenue estimate has been adjusted down to approximately $80 million to $90 million. In addition, 2022 adjusted EBITDA expectations are break-even.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
Follow her on Twitter: @UttaraProactive