- Operating Revenue: KD 32.5 million
- EBITDA: KD 207.9 million
- Total Assets: KD 654.2 million
Kuwait: National Real Estate Company (NREC), currently developing various mega projects in the Middle East and North Africa region, reported its financial and operational results for the year ended December 31, 2021. The Company announced a net profit attributable to the owners of the parent Company of KD 199.6 million and an EPS of 134.5 fils in 2021, compared to a net profit of KD 443 thousand and an EPS of 0.3 fils in 2020.
The Company’s operating revenue came in at KD 32.5 million for the year ended December 31, 2021, an increase of 93% compared to 2020. Total assets reached KD 654.2 million by December 31, 2021, an increase of 33% compared to 2020.
The Company’s Board of Directors has recommended the distribution of 20% bonus shares (20 shares for every 100 shares) for the year. This recommendation is subject to the approval of the General Assembly.
NREC Vice Chairman and Chief Executive Officer, Faisal Jamil Sultan Al-Essa, said: “Through another year of extraordinary circumstances, NREC’s Management proved once again that our dedication to putting our stakeholders’ interests first, acting with integrity, and delivering enduring value not only guides us through uncertain conditions, but enables us to thrive.”
“During the fiscal year 2021, we have remained focused on maintaining our longstanding priorities of maximizing value for our shareholders, safeguarding the Company’s financial health, preserving employment, and securing sustainable operations”, added Sultan.
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 operates and invests in companies that transform supply chain by making them smarter, faster, cleaner, fairer and more efficient.”
“Agility has an enviable track record of growth and sustained value creation for its shareholders, and has positioned itself as a leading provider of supply chain services, infrastructure, and innovation. Agility’s profile includes a number of businesses with the following five most financially material companies that are “controlled” by Agility: Agility Logistics Parks, Tristar, National Aviation Services (NAS), UPAC, and Global Clearinghouse Systems”, said Sultan.
“The recent investment of Agility in DSV, for a value of USD 4.2 billion as of the signing date, as well as Tristar’s acquisition of HNA Group’s stake of 51% in HG Storage International Limited for USD 215 million, and the latest announcement that the board of directors of Agility and one of its subsidiaries and the board of John Menzies have reached an agreement on the terms of a recommended cash offer made by Agility to acquire 100% of the ordinary shares in Menzies at a price of 608 pence a share, which is still subject to the approval of Menzies' shareholders and the relevant regulatory authorities, clearly demonstrate that a new phase of growth awaits Agility, and confirms that the Company is diversifying and strengthening its portfolio to secure sustainable business that will maximize value for shareholders”, added Sultan.
“NREC’s strategic investment in Agility dates back to 1997. As on December 31, 2021, this investment stood at KD 467 million on the Company’s books, with a current market value of around KD 600 million, which is around 6 times our current corporate debt. This investment has generated an IRR of 15% since inception and cash returns equating to 1,000%”, revealed Sultan.
Sultan added: “Agility’s deal with DSV Panalpina was reflected in 2021 results. Agility has sold its entire equity interest in Global Integrated Logistics (GIL) to DSV Panalpina, in exchange for 19.3 million shares in DSV, resulted in a gain after tax of around KD 897 million.”
“The value created by Agility for its shareholders is remarkable and commendable, it’s a major recognition of what the company has been able to build and create over the past 20 years. If we look at the last 10 years alone the investment has generated an IRR of 25% to NREC”, Sultan added.
Strategy of debt reduction to below KD 100 million
“The Company remains focused on its strategy of Debt Reduction to below KD 100 million in addition to an overall reduction of total company’s liabilities and expenses, which will strengthen NREC’s cash position”, said Sultan.
“In 2021, Management restructured a major portion of the Company’s debt with a local bank. The goal was to reduce liquidity risk and to support sustainable operations, given the overall impact of the current health and economic crisis. This resulted in extending the debt maturity and re-classifying the long-term portion of the facilities from current to non-current liabilities”, added Sultan.
“Our short term focus is also towards exiting certain assets, proceeds of which will be towards reduction of a major part of our debt”, revealed Sultan.
Impact of the sale of the Company’s shares in a subsidiary in Erbil - Iraq
“In Q4 2021, NREC sold its entire shares in a subsidiary in Erbil - Iraq (KREDCO Real Estate Limited Company), which represent 51% of the capital of the subsidiary, for a consideration of KD 4,545,000.“, stated Sultan.
Environmental, Social and Governance practices (ESG)
“NREC invests in developments that have a positive impact socially and environmentally, and it takes various initiatives to support social and environmental sustainability. Practices followed in this regard align with the United Nations Sustainable Development Goals (UNSDGs)”, said Sultan.
Sultan added: “NREC also follows and complies with the applicable corporate governance rules.”
Boursa Kuwait Market Segmentation Results 2022: NREC on Premier Market Watchlist 2022
“Based on the results of the latest review conducted by Boursa Kuwait for stocks with high turnover in 2021, announced by Boursa Kuwait on January 16, 2022, NREC was listed on Premier Market Watchlist for a year”, stated Sultan.
Forbes Middle East Ranking
NREC was ranked 3rd in Kuwait and 29th in MENA, on Forbes Middle East “Top Real Estate Developers in MENA 2021”, said Sultan. Companies under this category were ranked based on:
Financials: Total assets, market value, and revenues.
- Value and/or size of the land bank and number of units held by the developer.
- Value of projects completed.
- Value of projects under construction.
- The reputation of the developer in terms of delivering the properties to the buyer.
- Age of the company.
“We remain focused on enhancing the performance of our operating properties and the development of our two landmark projects Reem Mall in Abu Dhabi and Grand Heights in Egypt”, said Sultan.
Reem Mall - A completion rate of more than 98% – A highly automated unique logistics hub - Home to the region’s largest indoor Snow Park and an integrated omni-channel ecosystem
“Construction and pre-leasing at Reem Mall are progressing well, with a revised target project completion towards the mid of 2022, due to the repercussions of the Covid-19 crisis”, said Sultan.
“Completion rate was more than 98% as of the end of December 2021.”
“Carrefour Hypermarket opened its doors to Abu Dhabi’s customers at Reem Mall.”
“One of Reem Mall’s unique features is its state-of-the-art logistics hub, which is a highly automated warehouse that will support shipments from the mall’s stores to shoppers’ doors across the UAE.”
Located on Reem Island in Abu Dhabi, Reem Mall is a major new retail, leisure, dining and entertainment destination that comprises 450 stores and has a confirmed tenant-mix of leading retailers in the region and world.
“We remain optimistic about the successful transition of Reem Mall from a construction project to an operating asset, which will contribute to the growth in the Company’s revenues for future years.”
Grand Heights – The development and delivery of residential units continues to progress
In Egypt, the Company’s mega-residential project, Grand Heights, reached an advanced phase of development and delivery of residential units. Grand Heights is part of a larger plot owned by NREC’s subsidiary KUWADICO, and in which three sub-developers are developing various portions. The project covers a total of of 3.8 million square meters and caters to the housing needs of a growing population in Cairo and its suburban areas.
Sultan said: “Grand Heights enjoys an abundance of greenery, and offers its residents self-sufficient compound living. The percentage of units sold across the whole project as of the end of 2021 was more than 62%.”
“Total sold units across the entire project in Egypt stood at 5,505 and the remaining unsold units stand at 3,382”, added Sultan.
Strengthening the financial position by diversifying operational sources of income
Sultan said: “Reem Mall and Grand Heights are significant investments that will support NREC in growing and diversifying its sources of operating cash flow in the coming years.”
In Kuwait, NREC manages the waterfront destination, Souq Sharq, and the El Joan resorts.
South Aqaba Investment Park: Occupancy rate of 93% for warehouses, and 100% for industrial buildings
In Aqaba - Jordan, NREC’s subsidiary owns and operates the South Aqaba Investment Park, a 1.5 million square meters property dedicated for warehousing, factories, companies and logistics in an attractive investment climate that provides access to major international markets and Free Trade Agreements. “Occupancy rate as of the end of 2021 was 93% for warehouses, and 100% for industrial buildings”, said Sultan.
Palm City Residences: Occupancy rate of 51.2%
In Libya, Palm City Residences is the first fully operational project to be developed by the NREC’s joint venture in Libya, Mediterranean Investments Holding p.l.c. (MIH). This residential project is offering high-end facilities and security on the Mediterranean coastline in Janzour, a suburb of Tripoli.
“MIH distributed dividends during 2021, and Palm City Residences occupancy was 51.2% at the end of December 2021”, stated 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.
For more information, please contact: Mageda Abbas – email@example.com