KUWAIT: United Real Estate Company K.S.C.P (URC), one of the leading real estate developers in the MENA region, announced holding its Annual General Assembly Meeting for the financial year ended 31 December 2018 on Monday (29th April 2019) at the Public Authority for Industry in South Surra, attended by Tariq Mohammed AbdulSalam, Chairman of URC alongside the Executive Management Team and representatives from the Ministry of Commerce and Industry, the Kuwait Clearing Company and the Company's external auditor.
Tariq Mohammed AbdulSalam discussed significant financial highlights from the annual report for the year ended 31 December 2018, which provided an overview of the Company's major achievements over the past year. The report demonstrated the Company's resilience in adapting to different economic conditions and challenges to achieve both balanced financial results and substantial project milestones.
The Company recorded KD 103 million in operating revenues as compared to KD 87 million in 2017 and a decrease in operating profit from KD 21 million in 2017 to reach KD 9 million during 2018. The decrease in the company's profits was due to several factors mainly from a decline in properties value inside and outside Kuwait including the United Arab Emirates, in addition to the increase in the annual amortization of BOT investments in Kuwait due to the near end of these investments period. The Company recorded a net loss of KD 9 million in 2018 as compared to net profit of KD 2.2 million for the year end 2017. The Company recorded a 2.39 percent increase in total assets reaching a value of KD 617 million in 2018 as compared to KD 602 million in 2017.
Commenting on the results, AbdulSalam, said that despite the announced losses, the Company has achieved numerous positive and promising achievements for the future, the most important of which is maintaining the same operational performance (before provisions) and the continued growth in its services arms and construction sectors in line with the Company's recent diversification strategy.
AbdulSalam added that the Company in 2018 successfully issued KD 60 million worth of bonds with a maturity of five years with strong demand from high net worth individuals and institutions, reflecting investor confidence in the strategy put in place by the Company.
In pursuing these strategies, AbdulSalam asserted that the Company will continue to seek and exploit all possible opportunities to improve the performance of its operating assets with the objective of improving returns to its shareholders. This will be supplemented by the strategy to exit from non-performing assets, which in return, will improve the cash flows of the Company.
Furthermore, the Company realized several significant achievements in its ongoing projects during 2018. In the Kingdom of Morocco, the Company launched the second phase of the 2 million square meters "Assoufid" project. The development of the project's infrastructure continues to progress.
The project's first phase consists of an award winning, first-class golf course, while the second phase will comprise a five-star hotel and residential components, including branded villas and high-end apartments. In this context, the Company successfully signed a hotel management agreement with Marriott International which will introduce the "St. Regis" brand.
In Kuwait, the Company made significant progress in the "Hessah Towers" development, one of the largest ongoing projects located at Hessah AlMubarak District. The District comprises of a variety of components, which include residential, retail, commercial, clinics, and serviced apartments. In collaboration with world-renowned international design firms and consultants, the detailed design of Hessah Al-Mubarak development that includes other residential, recreational and business centers is underway.
In December 2018, the Company launched the construction of the first package of "Hessah Towers". Expected to be completed in 2022, the "Hessah Towers" project covers a total built up area of more than 63,000 square meters. Each tower consists of 40 floors that include apartments, duplexes, and townhouses characterized by their unique views of the Arabian Gulf and Kuwait City, in addition, to other amenities such as a health club, children's recreation areas, private gardens for the residents, a swimming pool and multi-level parking.
On another note, Ahmad Kasem, Acting Chief Executive Officer of URC, said that the Company achieved a significant increase of 19 percent in total revenues from its contracting and services arms, and the profit from these sectors increased by 73 percent. Kasem added that this is in line with the Company's strategy to diversify sources of income generated from these sectors.
In addition to the above, the present shareholders at the General Assembly Meeting approved the items of the agenda and elected a new board of directors for the Company for the upcoming three years.