NREC Announces a Net (Loss) of KD (35.2) Million for the Year Ended December 31, 2023

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Faisal Jamil Sultan Al-Essa, Vice Chairman and Chief Executive Officer, NREC

Kuwait City, Mar 31: National Real Estate Company (NREC) reported its financial and operational results for the year ended December 31, 2023. The Company announced a net (loss) attributable to the owners of the Parent Company of KD (35.2) million, and a (loss) per share of (19.8) fils in 2023, compared to a net profit of KD 17.9 million and an EPS of 10.2 fils in 2022.

The Company’s operating revenue came in at KD 12.4 million for the year ended December 31, 2023, as compared to KD 26 million in 2022. Total assets were KD 533 million by December 31, 2023, as compared to KD 539 million in 2022.

For Q4 2023, the Company reported a net (loss) of KD (33.7) million, or a (loss) per share of (18.9) fils, and operating revenue of KD 2.6 million.

Commenting on the Company’s results, NREC Vice Chairman and Chief Executive Officer, Faisal Jamil Sultan Al-Essa, said: “Despite the initial success of Reem Mall (RM) after its launch in the first quarter of 2023, and the opening of the eagerly anticipated Snow Abu Dhabi in H1 2023, RM encountered some challenges in the latter part of the year. These setbacks were influenced by global economic uncertainty and geopolitical tensions which impacted leasing interest and premature terminations.”

“Consequently, RM underwent a devaluation, resulting in an impairment on the investment which was recognized at the end of the financial year 2023.”

“While this presents a hurdle, NREC stands committed to being transparent and deems it essential to address the factors that contributed to the RM project’s performance during its inaugural year. NREC acknowledges that these external factors have played a role in the project’s initial operations, however we still maintain a positive outlook for the mall’s future performance.”

Dividend Recommendation

The Company’s Board of Directors has recommended the distribution of 5% bonus shares (5 shares for every 100 shares) for the year 2023.

This recommendation is subject to the approval of the General Assembly of Shareholders.

NREC’s strategic investment in Agility Public Warehousing Company K.S.C.P.

In addition to its core real estate business, NREC is the largest shareholder with a 22.3% share in Agility Public Warehousing Company K.S.C.P.

Agility is renowned for transforming supply chains to be smarter, faster, greener, fairer, and more efficient. It takes pride in its outstanding growth and value creation for shareholders, establishing itself as a top provider of supply chain services, infrastructure, and innovations.

Sultan said: “Agility’s Board of Directors has recently approved an interim cash dividend distribution.”

“Agility’s Board has also approved an in-kind dividend distribution estimated at KD 800 million (USD 2.6 billion), representing shares forming 49% of the issued share capital of a subsidiary, Agility Global PLC. This subsidiary, which manages key company operations and assets such as Menzies Aviation, Tristar Transport LLC, Agility Logistics Parks, and the DSV investment, is poised for listing on the Abu Dhabi Securities Exchange (ADX).”

“Following the distribution, Agility will retain a controlling stake of 51% in Agility Global PLC.”

“We believe that these developments underscore Agility’s commitment to delivering value to its shareholders and reflect positively on our investment in the company”, stated Sultan.

Short-term focus

“We remain focused on our goal of divesting certain assets, proceeds of which will be used towards the reduction of a major part of the Company’s debt obligations”, said Sultan.

Landmark Projects

“We are committed to improving the performance of our operational properties focusing on our two flagship projects, Reem Mall in Abu Dhabi and Grand Heights in Egypt”, said Sultan.

Reem Mall

Reem Mall is a new mall, situated on Reem Island, right in the heart of new Abu Dhabi, and covering nearly 2.8 million square feet of useable area.

It is destined to house around 450 of the finest international and local brands, as well as featuring around 85 restaurants and cafes and a range of family-focused entertainment offerings including Vox Cinemas, Carrefour Hypermarket, and the iconic Snow Abu Dhabi.

“The company holds a positive outlook for the mall’s future”, said Sultan.

Grand Heights

The Company’s residential project in Egypt, Grand Heights, has made significant progress in developing and delivering residential units. Grand Heights forms part of a more extensive parcel of land owned by NREC’s subsidiary KUWADICO, and is presently being developed in different sections by three sub-developers. Covering an area of 3.8 million square meters, the project addresses the surging housing needs of the growing population in Cairo and its suburbs. Sultan said: “The percentage of units sold across the whole project as of the end of 2023 was 81%.”

“Total sold units across the entire project in Egypt stood at 7,300 and the remaining unsold units stood at 1,676 by year-end”, added Sultan.

Established in 1973 and listed in Boursa Kuwait, National Real Estate Company (NREC) is a real estate investment, development and property manager based in the Middle East and North Africa. The Company’s portfolio comprises a mix of retail, commercial and residential properties in the region.

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