ALARGAN posts KD 4.7mn net profit in 2014

25 May 2015General Assembly approves distribution of 20 fils cash dividendKUWAIT CITY: ALARGAN International Real Estate Company held its ordinary General Assembly meeting on May 24, 2015, with an attendance level that reached 94.51 %. During the meeting, the assembly approved the Company's Audit Report and Financial Statements for the fiscal year ending in Dec 31, 2014.The General Assembly approv

  
25 May 2015
General Assembly approves distribution of 20 fils cash dividend
KUWAIT CITY: ALARGAN International Real Estate Company held its ordinary General Assembly meeting on May 24, 2015, with an attendance level that reached 94.51 %. During the meeting, the assembly approved the Company's Audit Report and Financial Statements for the fiscal year ending in Dec 31, 2014.

The General Assembly approved the Board of Director's recommendation to distribute cash dividends equal to 20% of the share's nominal value, or 20 Fils per share to shareholders registered in the company's records as of the General Assembly meeting's date.

ALARGAN International Real Estate Company achieved KD 4.7 million net profits, equaling to 18.17 fils earnings per share for the fiscal year ending on Dec 31, 2014. This compares to KD 3.9 million net profit, and 15.08 fils earnings per share in 2013. A growth of 20.5% in net profit for 2014.

In a statement underlining the firm's major policies, Haitham S. Al-Khaled, Chairman of the Board of Directors said: "ALARGAN has gone through a transformational process during the past two years. During this process, the company utilized its accumulated experience and its pool of talent to draft a strategy for accelerated growth.

Once this strategy and its related performance targets were confirmed, the Board asked the CEO to share them with our shareholders and the industry analysts. The presentation that Al Meshaan gave during the General Assembly covered both our vision for the future and the performance we intend to deliver to our shareholders, God willing. Our aim is to deliver a level of transparency and commitment that exceeds the accepted norms in our markets. We believe that only when we stand on a firm platform of trust will we succeed in meeting the expectations of our shareholders and our community."

Commenting on the results of 2014, Eng Khaled Al-Meshaan, CEO and Vice-Chairman of the Board of Directors said: "These results justify the company's plans to diversify its investments on categorical and geographical levels, without losing sight of its main field of business that focuses on delivering affordable middle income housing solutions. This approach has achieved a remarkable growth in the company's revenues."

Al-Meshaan added: "As part of executing the company's strategy to exit some investments and align its real estate portfolio to its strategy and market conditions, an investment fund wholly owned by the company signed two deals, during the year ending in Dec 31, 2014, with an investor to sell the entire share owned by the fund in a associate company in Saudi Arabia for a total value of 579.2 million Saudi Riyals (approximately KD 46.1 million).

The group concluded the first deal which represents 7.5% of total shares, worth 57.9 million Saudi Riyals (approximately KD 4.5 million), resulting in KD 3.3 million profits in 2014. The group subsequently concluded the second deal, worth 521.3 million Saudi Riyals (approximately KD 41.6 million), in April of this year, 2015. The profits gained from the deal worth 317.34 million Saudi Riyals (approximately KD 26 million), will be booked in the second quarter of ALARGAN International Real Estate Company's 2015 results."

ALARGAN managed to achieve an increase in its net profit in 2014 despite reducing the value of its investment properties and lands held for trading by KD 2.33 million compared to a KD 1.22 million increase in 2013. The company achieved a 43% increase in its share of result from associate companies amounting to KD 3.96 million in 2014 compared to KD 2.76 million in 2013.

ALARGAN also managed to maintain the stability of its operational activities of rental revenues and resorts in 2014 compared to 2013. The net profit from rental revenues and resorts reached KD 6.4 million in 2014 compared to approximately the same amount in 2013. Meanwhile, the construction sector and its related activities profitability dropped by 93% due to the conclusion of the majority of current projects while the effect of new projects' revenues are yet to appear on the company's financial statements.

The group's revenues increased from KD 25.27 million in 2013 to KD 26.42 million in 2014, or by 4.5% despite booking revenues from real estate revaluation during 2013. It should be noted that the group's total expenses increased from KD 21.34 million in 2013 to 21.66 million in 2014, or by 1.5%, despite recording losses from real estate revaluation this year.

In addition, current assets increased by 43% in 2014. The total assets in general increased by 6%, while the total liabilities in general increased by 5% in 2014. Equity rights attributable to the main company's shareholders have increased by 7% in 2013.

Al-Meshaan also emphasized the strength of the company's financial position as recently confirmed by maintaining Capital Intelligence's 'BBB-' investment grade rating with a stable outlook for its bonds. He pointed to it as an indication of the attractiveness of the company's business model and its growing revenues' record.

As for the company's current projects, ALARGAN continues to develop the ALARGAN Square project, which will be an important addition to the group's stable income generating assets. The company also developed ALARGAN Village in the Kingdom of Bahrain and is currently developing Barka resort in the Sultanate of Oman. The company also finished developing more than 1,200 housing units in different projects in the Kingdom of Saudi Arabia.

Al-Meshaan wrapped up the General Assembly meeting by unveiling the firm's new 5-year strategy inspired by its new motto 'Life... as you love it'. He reaffirmed the company's commitment to becoming a Leading Regional Real-Estate Developer.

"We shall continue to build inspired communities that deliver the 'joy of life' to our clients and develop 'lifestyle' centers with a unique 'play, shop, relax and savor' experience" said Al-Meshaan.

Al-Meshaan also introduced ALARGAN's new strategic 40/20 objective to be achieved by 2020. It targets achieving a minimum of 40 fils per share in profits and distributing 20 fils dividends per share on yearly basis starting 2020. Al-Meshaan stated that most of this target shall be secured through recurring income projects.

At the end of the meeting Al-Meshaan thanked the shareholders for their continued support. He also thanked ALARGAN team for their stellar performance and the Board of Directors for their guidance.

© Arab Times 2015