KUWAIT: United Real Estate Company (URC), one of Kuwait’s leading real estate development companies, announced its financial results for the year 2017, recording a profit of KD 2.2 million as compared to KD 8.7 million in 2016.
The decrease in net profit is due to several factors including; reduction in revenues from hotels (attributed to the renovation of the hotel in Kuwait and to the transition between hotel operators in Egypt), increase in losses from associates in Jordan and Morocco, increase in finance costs (due to the increase of the discount rate of the Central Bank of Kuwait), provisions relating to a legal dispute pertaining to Manazil Real Estate Investment Company (Egyptian Shareholding Company – Closed) and to foreign currency conversion losses.
The company witnessed strong growth in operating revenues, that reached KD 87 million. This translates to an increase of 23 percent as compared to the total operating revenues of KD 71 million in 2016. The company recorded a net operating profit of KD 21 million during 2017, similar to that recorded during 2016.
Total assets of United Real Estate Company increased by 5.24 percent to reach KD 602 million, as compared to 2016 (KD 572 million). The growth in assets is due to increase in investment properties and receivables resulting from higher contracting and service revenues.
Commenting on the results, Tariq Mohammed AbdulSalam, Chairman of URC, said, “URC has been able to achieve significant project milestones as well as demonstrate a strong growth in the company’s operating revenues, despite the economic challenges that we witnessed in the region during the year 2017. This growth is due to the company’s diversified and geographically-distributed developments and operations in Kuwait, Middle East, and North Africa.”
Furthermore, AbdulSalam said that the company has been able to make significant progress in its strategy during 2017. This includes the launch of landmark projects, including a portion of the “Hessah Al-Mubarak District”, one of the significant developments and the first-of-its-kind in Kuwait. The company also launched Phase 2 of “Assoufid” in Morocco, which consists of a five-star hotel and residential component that includes villas and high-end apartments. The project, which covers over more than two million square meters, includes a high-end golf course, as well as a number of different facilities and services.