NREC Q1 net profit up 9.8 pct to KD 3.6 mln – EBITDA rises 1.9% to KD 4.5 mln in first quarter
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KUWAIT CITY, May 14: National Real Estate Company (NREC), a leading regional developer with development projects exceeding $1 billion in Egypt and the UAE, announced first quarter net profits of KD 3.6 million, an increase of 9.8% from the same period last year. The company’s positive outlook for bottom-line growth was kept unchanged for 2016.
The company registered revenue growth in key income generating assets in Kuwait and Egypt, where it is developing a 3.8 million square meter residential community. NREC is also developing Reem Mall, a two million square foot major shopping destination in Abu Dhabi. Reem Mall, will house more than 420 stores, 85 restaurants, a large hypermarket, and family entertainment zones including the world’s largest indoor snow-play park. The development is scheduled to open in 2018.
Q1 2016 Financial Highlights
* Operating Revenue: KD 7.3 million, up 73.1% from Q1 2015
* Gross Profit: KD 1.4 million, down 0.3% from Q1 2015
* EBITDA: KD 4.5 million, up 1.9% from Q1 2015
* Net Profit to shareholders: KD 3.6 million, up 9.8%
* Earnings Per Share (EPS) of 4.05 fils
Q1 2016 Regional Business Highlights
Kuwait: Rental income increased by 4.8% year-on-year to KD2.7 million while maintaining overall occupancy at 98%. The company has six properties in Kuwait, with Souq Sharq being the company’s primary asset.
Jordan: The company recorded revenue of KD 218K. NREC’s primary asset in the country is the 1.5 million square-meter Aqaba Warehousing and Industrial Park.
Egypt: n Grand Heights generated EGP125.2 million in sales in Q1 2016, bringing total sales to EGP2.50 billion, and the number of units sold to 778.
* Handover of Phase 1 units commenced in Q1 2016 and the project is scheduled to be completed in 2021 with total projected revenue of EGP11.4 billion for the project.
* 150 units planned for delivery in 2016.
UAE: n Enabling works at Reem Mall commenced in Q4 2015. Main construction work is scheduled to start in 2016. The company is currently evaluating bids from a select group of Tier 1 contractors with an established mall experience.
* Leasing interest is exceeding company expectations. NREC is currently engaged in discussions with retailers for more than 70% of the total space.
NREC CEO Samuel Sidiqi said, “We’ve had a positive quarter despite economic pressures in the region. Both our topline and bottom line growth were driven by healthy and consistent rental income streams from our Kuwait and Jordan assets, as well as sales from our Grand Heights development in Egypt, which will continue to drive revenue for the remainder of 2016 and the years to come. We’ve reached a positive turning point in the life of the project which has welcomed its first tenants recently; this transition is raising the project’s profile in Egypt, which will add further value to the business.”
“We have also crossed important milestones with Reem Mall in Abu Dhabi. Enabling works commenced while the tendering process for the main contractor is under way. We also acquired the developer license from the Abu Dhabi Department of Municipal Affairs after the new Real Estate Law came into effect this year. Reem Mall is an exciting landmark project that has attracted strong interest from top international retailers looking to grow in the region.”
Sidiqi added, “Our outlook for the remainder for 2016 is positive despite the regional economic climate. Egypt, Kuwait, and Jordan will continue to provide strong cash flow for the company through rental income streams and unit sales at Grand Heights. Development activities at Grand Heights and Reem Mall will progress substantially as management focuses on project delivery.”
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