Kuwait-based United Real Estate Company (URC) has recorded a 18.3 per cent growth in its operating revenue for 2018 which hit KD103 million ($338 million), while its operating profit fell from KD21 million the previous year to KD9 million.
The decrease in the company’s profits was due to several factors mainly from a decline in properties value inside and outside Kuwait including the UAE, in addition to the increase in the annual amortization of BOT investments in Kuwait due to the near end of these investments period, said the developer.
Announcing the results for the financial year ended December 31, 2018, URC said the group also swung to a net loss of KD9 million in 2018 from a net profit of KD2.2 million the previous year.
It recorded a 2.39 per cent increase in total assets reaching a value of KD 617 million in 2018 as compared to KD 602 million in 2017.
The result were declared in the presence of Tariq Mohammed AbdulSalam, chairman of URC and representatives from the Ministry of Commerce and Industry, the Kuwait Clearing Company and the company’s external auditor along with the company executive management team.
AbdulSalam discussed significant financial highlights from the annual report for 2018, which provided an overview of the Company’s major achievements over the past year.
The report demonstrated the company’s resilience in adapting to different economic conditions and challenges to achieve both balanced financial results and substantial project milestones.
Commenting on the results, AbdulSalam said that despite the announced losses, URC has achieved numerous positive and promising achievements for the future, the most important of which is maintaining the same operational performance (before provisions) and the continued growth in its services arms and construction sectors in line with the Company’s recent diversification strategy.
He pointed out that the company in 2018 successfully issued KD60 million worth of bonds with a maturity of five years with strong demand from high net worth individuals and institutions, reflecting investor confidence in the strategy put in place by the company.
In pursuing these strategies, AbdulSalam asserted that the Kuwait company will continue to seek and exploit all possible opportunities to improve the performance of its operating assets with the objective of improving returns to its shareholders.
This will be supplemented by the strategy to exit from non-performing assets, which in return, will improve the cash flows of the Company.
Furthermore, URC realised several significant achievements in its ongoing projects during 2018. In the Kingdom of Morocco, the company launched the second phase of the 2 million sq m “Assoufid” project. The development of the project’s infrastructure continues to progress.
The project’s first phase consists of an award winning, first-class golf course, while the second phase will comprise a five-star hotel and residential components, including branded villas and high-end apartments.
In Kuwait, URC made significant progress on the “Hessah Towers” development, one of the largest ongoing projects located at Hessah AlMubarak District.
The district comprises a variety of components, which include residential, retail, commercial, clinics, and serviced apartments.
In collaboration with world-renowned international design firms and consultants, the detailed design of Hessah AlMubarak development that includes other residential, recreational and business centre is underway.
In December 2018, the Company launched the construction of the first package of “Hessah Towers”. Expected to be completed in 2022, the “Hessah Towers” project will offer a total built-up area of more than 63,000 sq m.
CEO Ahmad Kasem said the company achieved a significant increase of 19 per cent in total revenues from its contracting and services arms, and the profit from these sectors increased by 73 per cent.
"This is in line with the company’s strategy to diversify sources of income generated from these sectors," he added.-TradeArabia News Service