Eshraq Investments posts slight profit for 2018 following implementation of new management vision

Results represent a second year of profitable operations for Abu Dhabi firm

Eshraq Investments, the Abu Dhabi-based investment and real estate company listed on Abu Dhabi Securities Exchange, has reported a net profit of $816,644 for 2018, versus a net profit of $8.84 million in the previous year.

The results represent a second year of profitable operations for Eshraq under new management, the company said in a statement. It added that its hospitality, leasing, investments and development segments all contributed to the company’s profits.

The Abu Dhabi group’s hospitality and leasing business maintained its market leading rental yield and occupancy rates of more than 91% in 2018, it said in a statement, adding that it outperformed its peers. Meanwhile, Eshraq’s investment portfolio contributed finance and investment income, it added.

With regards to developments, it said that construction on its Marina Rise project was 19% complete, and that it is targeted to be ready by the second quarter of 2020. Once completed, the project will be Eshraq’s first development project to contribute to the bottom line from next year.

The company also explained that because of the slowdown in the UAE real estate sector and a drop in asset prices, it had taken a non-cash impairment on its investment properties, which had a negative impact on profitability.

It said that its target to diversify its revenue sources worked to its benefit in 2018, as its investment portfolio offset the impact of declines in real estate earnings.

Jassim Alseddiqi, chairman of Eshraq Investments, said that 2018 was the year the company implemented its new vision. The efficient utilisation of excess cash balance helped the company shift slowly from pure real estate development activity to investments in real estate and commercial assets and funds, he explained.

The new corporate identity and change of name represented a necessary step to emphasise this transformation, he added. The effective deployment of excess cash into income generating investments helped cushion the slowdown faced in the real estate sector, Alseddiqi said.

On February 13, 2019, Eshraq Investments announced that it was renaming itself from Eshraq Properties, and that it was introducing new corporate branding, following approval from shareholders during a general meeting.

It said the rebranding comes as it works on a “robust” pipeline of projects with all its developments making significant progress to meet their completion time.

“The enlarged scope of business activities magnifies the investment opportunities that Eshraq is now able to consider and invest in to maximize shareholders’ value,” Alseddiqi concluded, adding that Eshraq has several investment opportunities in various new sectors outside real estate.


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