News Archive

NREC announces Q2 2015 earnings

15 - August - 2015

The National Real Estate Company (NREC), one of the leading real estate companies in the Middle East and North Africa (MENA), today released its earnings for the second quarter (Q2) of 2015. The company registered a net profit of KD4.4 million for Q2 2015, reflecting an increase of 9.8% from Q2 2014 and a 33.6% increase from Q1 2015.

NREC’s rental and sale properties portfolio includes malls, office towers, residential complexes and resorts in Kuwait, Egypt, Jordan, UAE, Lebanon, Iraq and Libya.

NREC CEO Mr. Samuel Sidiqi said, “I am pleased to report strong topline and bottomline growth in our second quarter earnings. Operationally, we are progressing well with our two key developments in Cairo and Abu Dhabi, each of which is a billion plus dollar project, while pursuing growth opportunities in Kuwait.

“The Kuwaiti commercial property business remains solid with rental income of KD5.1 million and occupancy at 98.0%. Revenues from our Egyptian subsidiary came in at a record KD4.3 million, reflecting strong demand for high-end residential housing there. Furthermore, our focus on improving profitability is reflected in our outstanding operating profits of KD3.2 million in H1 2015, with a 48.5% increase from a year ago.”

Q2 2015 Financial Highlights:
● Revenue from Operations: KD5.6 million, up 31.6% from Q1 2015 and up 24.2% from Q2 2014
● Gross Profit: KD1.9 million, up 43% from Q1 2015 and 144.8% from Q2 2014
● Gross Profit Margin: 35.0%, up from 32.2% in Q1 2015 and up from 17.8% in Q2 2014
● EBITDA: KD5.4 million, up 25.0% from Q1 2015 and down 0.8% from Q2 2014
● EBITDA Margin: 58.4%
● Net Profit: KD4.4 million, up 33.6% from Q1 2015 and up 9.8% from Q2 2014
● EPS: 4.90 fils, up 33.6% from Q1 2015 and up 9.8% from Q2 2014

H1 2015 Financial Highlights:
● Revenue from Operations: KD9.8 million, down 1.4% from H1 2014
● Gross Profit: KD3.3 million, up 56.8% from H1 2014
● Gross Profit Margin: 33.8%, up from 21.2% in H1 2014
● EBITDA: KD9.7 million, down 8.6% from H1 2014
● EBITDA Margin: 59.2%, up from 55.6% from H1 2014
● Net Profit: KD7.7 million, down 6.0% from H1 2014
● EPS: 8.58 fils, up 34%, down 6% from H1 2014

Balance Sheet Highlights:
● Total assets: KD562 million, up by KD9.2 million from December 2014
● Shareholders’ equity: KD210 million, up by KD9.9 million from December 2014

H1 2015 Update on Developments and Investments
● In Kuwait, rental income grew by 4.3% to reach KD5.1 million.
● In Egypt, revenues for Grand Heights development in Cairo grew by 10.3% to KD4.3 million in H1 2015. Sales at the premium residential development continue to be driven by strong demand and limited inventory which has resulted in sizeable increases in house prices. The project has sold 722 units by June 30th, 2015.
● In Abu Dhabi, plans for the construction of Reem Mall, a two million square-foot super regional shopping centre, are rapidly moving ahead. The billion dollar project will consist of more than 420 stores, including 85 restaurants, a large format hypermarket and an unparalleled breadth of entertainment and leisure offers. Reem Mall has received preliminary approvals from the Urban Planning Commission (UPC) and plans for enabling works to start later this year.
● In Jordan, revenue was reported at KD391,837 consistent with the company business plan. Rent and demand remain stable at the 1.5 square meter Aqaba Warehousing and Industrial Park property owned by NREC subsidiary.

Outlook for the Full Year 2015
Sidiqi said, “For the remainder of the year, we expect continued growth at our domestic and regional property portfolios. Sales at the Grand Heights development are expected to continue on the back of strong buyer demand and price growth. We are excited that the construction of Reem Mall, a transformational asset in our regional portfolio, is projected to begin later this year. Furthermore, we remain focused on enhancing shareholder returns by improving our cost structure and improving profitability.”