Lot has to be done to achieve same results like last year
KUWAIT CITY, Nov 30: With the return of life and economic activity in Kuwait, real estate companies listed on the stock exchange have started compensating for the large losses recorded during the first half of this year due to closure restrictions imposed on commercial complexes and activities in the country after permitting rental reductions and granting tenants the possibility for payment delays and exemptions, which severely affected the profits of real estate companies this year until the end of June 2020, reports Al-Anba daily.
With the gradual return to normal activities during the third quarter of this year (from July to September), real estate companies began to breathe a sigh of relief and reduce the losses they recorded during the second quarter of the year, which was the most severe due to the general closure and complete cessation of economic activities during the months of May and June. Based on the financial data of the real-estate companies listed on Kuwait Stock Exchange, which announced its data for the third quarter of this year so far, 34 out of 39 real estate companies were able to reduce and mitigate their losses recorded during the second quarter of this year by about 51 percent.
Their losses recorded during the third quarter decreased to KD 15.1 million, compared to the losses of KD 30.7 million recorded during the second quarter of the year. This indicates that it is on the path of correcting conditions and returning to record profits again during the coming period. Despite the good performance during the third quarter of this year, real estate companies still have a lot to do to achieve the same results they did last year. Their data during the first nine months of 2020 indicate their shift in recording losses compared to the results of the same period in 2019, as it recorded losses amounting to KD 33.17 million in nine months compared to profits of KD 96.4 million.
According to the data, six real estate companies, which recorded losses during the second quarter, were able to make profit during the third quarter of this year, with the highest profit of KD 7.9 million made by the Mabanee Company compared to the losses of KD 7.77 million it incurred in the second quarter.
The National Real Estate Company came second with profits amounting to KD 3.4 million during the third quarter, compared to losses of KD 1 million in the second quarter. The rest of the companies that managed to turn to profit in the third quarter are as follows – United Real Estate Company with profit of KD 746,000, Commercial Real Estate Company with profit of KD 1 million, Al-Enmaa Real Estate Company with KD 60,000 profit, and Al-Tameer Real Estate Investment Company with profit of KD 100,000.
Seven real estate companies that made profits during the second quarter were able to continue achieving profits during the third quarter of this year. Kuwait Real Estate Company came on top with profits of KD 1.12 million compared to profits of KD 266,000 in the second quarter, which is a growth of 282 percent. Ajial Real Estate Company came second with profits of KD 567,000 in the third quarter, compared to KD 521,000 in the second quarter, with a growth of 9 percent.
The rest of the companies that continued to grow in their profits in the third quarter compared with the second quarter are as follows – Arkan Al- Kuwait Real Estate Company with profit of KD 254,000 and a growth of 8.4 percent compared to the second quarter profits of KD 235,000, Business City Company with profits of KD 383,000, Dubai First Real Estate Development Company with profits of KD 365,000, and Dalkan Real Estate Company with profits of KD 34,000.
Also, four real estate companies witnessed a decline in their profits in the third quarter compared with the second quarter. Two companies switched to recording losses in the third quarter, and eight companies were able to reduce the losses they recorded during the second quarter based on their results in the third quarter. In addition, seven other companies’ losses were deepened during the second quarter as they did not benefit from the return of economic activity during the third quarter.