Real estate firm says increase in operational earnings was driven by strong residential unit sales and other factors
Alargan, the Kuwaiti real estate company, has reported revenues of $88.4 million for 2016, marking a 37% increase from the $64.3 million posted in 2015.
In a statement announcing its 2016 financial results, Alargan said that its net profit for the year was $5.91 million, a drop from $54.8 million the previous year. It added that its earnings per share (EPS) was 7.09 fils for the year ending December 2016, over 65.32 fils recorded in 2015.
The increase in operational earnings was driven by the performance of the company’s core income-generating assets, advancements in new developments and strong residential unit sales, the company said.
It added that yields generated from real estate investments in prime locations around the globe also contributed to the jump.
“Despite a significant increase in our operational earnings, our bottom line in 2016 shows a decrease in comparison to the previous year because of an exceptional one-time gain of $86 million from a divestment that was accounted for in 2015,” said Khaled Al Mashaan, chief executive and vice chairman of the board of directors of Alargan International Real Estate Company.
“Putting the one-time gain aside, operating profit increased in 2016 to $9.68 million in comparison to a KD7.07 loss in 2015. Expenses decreased by 14% from $95.5 million in 2015 to $82.4 million in 2016,” he added.
Increase of revenues in developments, contracting and related services to K$985,361 in comparison to a loss of $6.24 million in 2015. Meanwhile, profit from rents and resorts was sustained at $20.69 million, while profit from change in fair value of investment properties in 2016 increased to $3.28 million, in comparison to a $17.4 million loss suffered in 2015.
Total assets decreased by 2.4% and total liabilities decreased by 6.1%, the company added. Revenues from investments in real estate and securities portfolios and funds increased to $716,029. Financing expenses decreased by 33.7%, the statement said.
“Alargan continued to deliver on its strategy launched in 2015 which focuses on improving the performance of its core income-generating assets while operating through a combined developer and investor business model in an aim to deliver a sustainable business that adds value to shareholders, and provides life-enhancing and sustainable solutions in the region,” Mashaan concluded.