Al Mazaya Holding is continuing to make strides in its plan to complete and deliver all its current real estate projects despite challenges related to both the real estate markets and investors, and the company has commenced operating its income generating projects, according to Rashid Al Nafisi, Chairman of Al Mazaya Holding.
Al Nafisi was speaking at the company’s General Assembly meeting, which was held at the Clover Centre in Mazaya Tower, Al Jabriya District, yesterday morning, in the presence of 83.32 percent of the board’s members.
The balance sheet and final accounts for the fiscal year ended 31 December 2010, which were approved during the meeting, showed that in 2010, Al Mazaya was able to redirect its assets and achieve liquidity of more than KD11 million through its exit from Seven Zone commercial project, a joint venture between an individual investor and Al Mazaya, which designed, developed and carried out the entire project.
According to Al Nafisi, the company helped fill the gap in Kuwait’s building materials sector through this project by providing integrated services ranging from parking spaces to the region’s largest facility for building and construction materials, offices, showrooms and storehouses under one roof. Al Mazaya has trademarked the project, which it aims to launch in other countries in the region. “The revenues generated by this sale will be used to fund the company’s expansion plans over the next few years,” he said.
Al Nafisi said the company in 2010 achieved operating revenues of KD18.64 million, including operating profits of KD4.47 million and other revenues of KD6.08 million.
The company had to take provisions totaling KD14.93 million, which resulted in a total loss of KD8.60 million after deducting other expenses.
“Due to the ongoing difficulties in most of the regional markets, including Dubai, where a large part of our real estate projects are based, Al Mazaya had to carry over provisions, on which the company will relay in the coming years,” he added.
Al Nafisi said that due to the company’s 2010 operational results, as well as local and regional economic challenges, the Board of Directors has recommended not distributing any dividends for the year ended 31 December 2010.
“2010 was a year of major market-related challenges for Al Mazaya Holding, both internal and external, and yet the company was able deliver on the promises it made in 2009,” he said.
“The company did not put any of its projects in Kuwait or Dubai on hold, rather completing most of these projects and commencing delivery, as well as managing to lease a large portion of its revenue-generating projects, despite the fact that a large number of buyers defaulted or delayed payment of their installments, which placed an additional burden on the company. Al Mazaya managed to find solutions to these challenges by concluding a number of deals and restructuring certain plans in the interest of the company and its shareholders.”
Al Nafisi added that 2010 witnessed Al Mazaya’s successful acquisition of 93 percent of First Dubai Real Estate Development Company, a Kuwaiti shareholding company listed on the Kuwait Stock Exchange with paid-up capital of KD100 million, and over KD107 million total assets, including Sky Gardens, the state-of-the-art residential landmark located in the heart of the Dubai International Financial Centre (DIFC) with a stunning view of the Burj Khalifa.
Al Mazaya previously sold 60 percent of the project and invested the remaining 40 percent through offering residential apartments for lease.
“The acquisition of First Dubai has helped us to reduce administrative expenses through merging various departments at the two companies, and this is expected to lead to an increase in operating revenues and profits by the end of next year”.
He said Al Mazaya managed to cut costs in 2010 by 35 percent compared to 2009. This was achieved by forming committees from the Board of Directors, one to follow up on the company’s financial and real estate investments, one for internal auditing to ensure that cash flow was in compliance with the approved budget, and a third for personnel affairs.
“In KSA, Al Mazaya is currently offering its three Al Ma’thar office towers in Riyadh for lease. One has already been fully leased, and the other two towers are still being offered. In Dubai, the company was able to deliver the Villa residential project, situated in Dubailand, to clients. The project is comprised of more than 500 villas, and work is underway to deliver the final phase. Business Avenue, which comprises three office towers in Jumeirah Lakes, has also been completed and delivered to clients, and we are on track to complete and deliver residential units at the multi-building, middle-income Q-Point development in Liwan,” Al Nafisi said.
Al Mazaya Real Estate Development Co., listed on the Kuwait Stock Exchange and Dubai Financial Market, created a distinctive place for itself in the economic sector through the implementation of several major and vital projects across the region.
Al Mazaya Holding has conducted several feasibility studies for strategic investment in number of property markets and has investments in others such as KSA, Bahrain, Oman and Qatar, with the aim of achieving high returns.