KUWAIT: Al-Mazaya Holding held its Ordinary General Assembly Meeting of 2015, on 28 March 2016, at Al-Murqab District, Sharq, at Al-Mazaya Tower 1, one of its 3 Towers in the heart of Kuwait capital with a quorum of 70.77 percent.
Rashid Yaqoub Al-Nafisi, Chairman of the Board, called the meeting to order, in the presence of shareholders, members of the board, Group CEO Eng. Ibrahim Al-Soqaabi, a representative from the Ministry of Commerce and Industry, and representatives from the company’s external auditors. Investors and media representatives, from across the GCC, were also in attendance.
The General Assembly began with a documentary film titled “Al-Mazaya 2050”, after which, Al-Nafisi presented the Board’s report on the fiscal year ended 31 December 2015. The overall message being that Al-Mazaya Holding continues to realize steady growth, based on solid internal and external foundations.
Al-Nafisi said: “Al-Mazaya Holding was able to maintain steady performance levels and positive results, in 2015, proving an exceptional ability to be immune from economic and geopolitical fluctuations, in the surrounding region. The company has continued to achieve positive leaps in its financial results and reported a net profit of KD 9.32million, by end of 2015, a 15.2 per cent increase from KD 8.09million, by end of 2014. Earnings per share (EPS) was calculated at 15.04 fils per share, by end of 2015, compared to EPS 13.05 fils, by end of 2014.”
Al-Nafisi said: “During the last year, Al-Mazaya Holding was able to maintain healthy performance in its projects’ sales and in increasing occupancy at its income-generating projects. This led to a 258.9 per cent rise in the operating revenues to KD 59.82 million, by end of 2015, up from KD 16.66 million, by end of 2014. This significant leap in revenue is credited to a combination of the marketing plan, the huge demand for the units available for sale, and growing investor confidence in the company’s brand. This has resulted in a 385.6 per cent growth in sales revenue, from KD 10.97 million, by end of 2014, to KD 53.27 million, by end of 2015. Total rental revenues jumped by 16.4 per cent, from KD 5.3 million, in 2014, to KD 6.17million, in 2015.”
“As a result, the company was able to achieve an increase of 157.6 per cent in gross profit, generated from operating activities, amounting to KD 16.14 million, compared to KD 6.27 million, in 2014,” he added.
“In light of the excellent revenue achieved last year, Al-Mazaya Holding’s Board of Directors has recommended 7 per cent cash dividends to all shareholders – a sign of its commitment to share the company’s success with shareholders, as well as proof of the company’s financial strength, solvency and evidence of the company’s balanced future plan. We submit this recommendation to the Annual General Assembly for approval, having first fulfilled all the requirements of the Capital Markets Authority and the concerned government regulators,” he said.
“By the grace of Allah, Al-Mazaya has become stronger than ever,” he concluded.
Al-Nafisi extended his heartfelt thanks and gratitude to all the board members, executive management, engineering staff, technical and vocational personnel, and all employees, for their contribution in the company’s success. He also assured attendees that Al Mazaya would remain one of the best and most influential firms in the GCC and Arab region.
Agenda of the General Assembly Meeting
Al-Nafisi presented the agenda of the Ordinary General Assembly Meeting of 2015, which were approved , with attendees reviewing and approving the Auditor’s Report and the Financial Statements of the fiscal year ended 31 December 2015. The Board’s recommendation to distribute seven per cent of the paid-up capital as cash dividends – equivalent to seven fils per share.
The General Assembly further permitted Members of the Board to trade from their own accounts or others’ accounts at any of the company’s branches, in 2016, in accordance with Article No. 197 of the Companies Law No. 1 of 2016, and Article No. 20 of the Statute of the Company. Furthermore, the Board was authorised to purchase or sell company shares at no more than 10 per cent of the total shares, as per law no. 7 of 2010 and its executive by law and its amendments thereafter.
The General Assembly also approved to discharge the Board Members from legal liability for the fiscal year ended 31 December 2015. Approval was also given to deduct 10 per cent of net profits for the statutory reserve requirement, in accordance with Article No.222 of the Companies Law No.1 of 2016, and an additional 10 per cent of net profit for the voluntary reserve, which will be used for any future obligations, in accordance with Article No.225 of the Companies Law No.1 of 2016.
In addition, the General Assembly approved the reassignment of the external auditors for the fiscal year, ending on 31 December 2016, and to authorise the Board to determine their fees, provided that the auditors are already registered with the Capital Market Authority.
Election of new Board Members
The General Assembly elected a new board of directors for a three-year term. They are:
* Rashid Yaqoub Al Nafisi
* United Circle Company
* Abdulhamid Muhraiz
* Mohammed Khalid Othman
* Rasha Abdullah Al Qunaie
In a statement prepared for the meeting, Group CEO of Al-Mazaya Holding, Eng. Ibrahim Al-Soqa’abi, said that the company was able to maintain a balanced growth in profit and financial position through entry into new projects, completion of ongoing projects and the regular delivery of existing projects. He added that the company has made a series of administrative, operational and financial achievements, during 2015, of which all the company’s employees have a right to be proud.
Al Soqa’abi added that Al Mazaya was able to launch its CRM software in Kuwait and Dubai, and this unprecedented step means the establishment of a direct link for sales, rent and customer service operations between the parent company and its subsidiaries. The company has also activated the first phase of its ERP accounting system – at the group level.
“At the operational level, the company was able to achieve a high sales rate in terms of projects and properties offered for sale. These included its projects in the UAE and Turkey. The company has also managed to increase its revenue from rental activities, which accounted for over 96 per cent of the company’s total operating profit,” he said.
“At the financial level, the company was able to achieve impressive results, with a significant increase in gross profit generated from operating activities. I am also pleased to inform you about the company’s latest achievements in terms of credit facilities. Al-Mazaya was able to convert 100 per cent of its loans into Islamic financing products, as well as reducing the cost of financing and converting all its loans from short-term to medium and long-term arrangements – further demonstrating the company’s solid financial standing and its credibility in the market,” he added.
Al-Soqabi said that Al-Mazaya’s major achievements in 2015 included:
1. The acquisition of a commercial tower in Riyadh, through a subsidiary company. The tower is situated in the Al-Olia area and was acquired for KD 10.5m with an annual investment yield of up to 9 per cent.
2. Through one of its subsidiaries (Al-Mazaya Real Estate Development), a plot of land, located in the Sharq area of Kuwait City, worth KD 8 million was purchased. The master plan and concept of the project is currently being developed and an engineering firm will soon be appointed to commence the design and licensing works.
3. Al-Mazaya has awarded construction works for its 17-storey medical facility, in Sabah Al-Salem, Kuwait, to a leading contractor. Drilling and piling works on the 2,000 square metre project has commenced in preparation for the structure, which will take 20 months to complete.
4. As a result of its increased promotional campaigns for the Ritim Istanbul development (a joint venture project with Dumankaya Real Estate), over 70 per cent of the units were sold, 2015. The project is now over 85 per cent completed and the handover of project is expected next April. [2016 or 2017?].
5. Al-Mazaya continued its extensive promotional campaigns to sell its Queue Point property, in Dubai. The project is over 85 per cent completed, with over 80 per cent of the units sold and it is expected for delivery by end of 2016.
6. Al-Mazaya completed its Logistics Services Project in Bahrain; the current occupancy rate is 45 per cent.
7. Al-Mazaya awarded construction works for the Al-Mazaya Residence project, in Al-Mawaleh, Al-Seeb Governorate, Oman, to a leading contractor.
8. Al-Mazaya achieved 45 per cent completion on the first phase of its Queue Line residential project, which consists of four new buildings in Dubai Land, Dubai. Construction works are progressing and the handover is expected by end of 2016.
9. Al-Mazaya boosted income generated from existing (fully occupied) projects by renewing lease contracts and increasing rates to reflect the current market prices and the quality services provided, by the Property Management Department. This step helped increase operating revenues generated from lease operations.
10. NBK Capital estimated the fair value of Al-Mazaya stock at KD 0.165, after taking all the precautionary measures and evaluation standards into consideration. This followed an in-depth study of the company’s projects and balance sheet.
Al-Mazaya is currently studying many investment opportunities in the markets in which it operates, particularly in the GCC and Turkey. These markets are seen as the most appropriate avenues to explore, in helping realise the company’s expansion strategy. Al-Mazaya has gained confidence in these markets following its proven track record of completed real estate projects. The company’s growth in these markets will include many strategic partnerships and joint ventures with elite investors to achieve the highest returns that serve the interest of the company and shareholders alike.