Figures in the table above have been rounded
Kuwait, March 13, 2018 - National Real Estate Company (NREC), a leading regional asset manager and developer headquartered in Kuwait with USD2 billion in projects under development in the UAE, Egypt and other markets, today released its financial results for 2017.
The Company recorded an operating revenue of KD38.5 million, an EBITDA of KD13.9 million and a net profit of KD10.6 million. NREC's core operational activity continues to grow, however the decrease in the EBITDA and Net Profit for the year is mainly attributed to a fair valuation write down taken on BOT projects nearing their expiry within NREC's portfolio.
Board of Directors Recommendation
The Board of Directors has recommended a dividend distribution of 10% of bonus shares, subject to approval of the General Assembly of Shareholders.
2017 Business Review
NREC Vice Chairman Faisal Sultan said, “2017 was a very active year on many fronts. Operationally, our rental business in Kuwait and Jordan continued to perform, our Libyan business has improved with the improving of security situation in the country, and the Kuwait market presented new business opportunities that we are actively pursuing. Current developments continued to progress as well. We have crossed important milestones in our two largest projects, Grand Heights in Egypt and Reem Mall in UAE. Both projects are progressing well and in line with expectations. Our balance sheet was also an area of constant focus.
In 2017 we worked on strengthening our balance sheet, with good results to date, looking forward 2018 will be a year where NREC continues to focus on asset repositioning and debt reduction, with a stated objective of reducing leverage to below KD 100 Million. This objective along with the execution of our ongoing projects, is an essential first step towards restoring regular cash dividend payments to shareholders”.
2017 Business Highlights
- In Kuwait, NREC was selected as one of 5 pre-qualified local companies by the Kuwait Authority for Partnership Projects (KAPP) to bid on the South Jahra Labor City and NREC expect further nominations during 2018. KAPP is the authority in charge of leading the country's Public Private Partnership (PPP) projects.
- Reem Mall's progress crossed important milestones. Al Farwaniya Property Developments, a partnership between Agility, Agility affiliate United Projects for Aviation Services Company (UPAC), and National Real Estate Company (NREC), signed an agreement for a $457 million senior credit facility with a syndication of four local and international banks: ADCB, Standard Chartered, Noor Bank and Gulf Bank Kuwait. In parallel, a $620 million construction contract was signed with Itinera Ghantoot, a UAE-Italy joint venture, who will serve as the lead contractor on the $1.2 billion project. The 32-month construction program commenced in the fall.
- At the Grand Heights residential community in Egypt, NREC has sold 995 units and plots, of which 460 were delivered as of December 31 2017, with a total cumulative sales value (delivered and to be delivered) of EGP 3.4 billion.
- NREC's JV in Libya, Palm City Residences had a positive year reporting operating profits of 3.3 million euro with occupancy rate rising from 8% to 24%. The project continues to be the best choice for multinational companies and government agencies participating in the recovery of Libya.
2017 Balance Sheet Highlights
- Strengthened NREC's capital and shareholder base with the successful placement of the convertible KD 31 million financing from Agility Logistics Company which is in the process of being converted to equity.
- Bank dues were reduced from KD 161.7 million to KD 149.4 million.