Sales and rent increases lift Al Mazaya profit

Al Mazaya Holding’s fourth-­quarter net profit rose 7 per cent as the Kuwaiti property developer boosted sales of its projects in Dubailand and the fair value of its investment properties rose.

Net profit in the three months to December 31 rose to 2.5 million Kuwaiti dinars (Dh30.2m) from 2.4m dinars in the year-earlier period, the company said. Total operating revenue reached 20.8m dinars in the fourth quarter, up from 1.36m dinars the previous year, beating forecasts from Kuw­ait’s NBK Capital.

“Al Mazaya boosted income, generated from existing fully occupied projects, by renewing lease contracts and increasing rates to reflect the current market prices … this helped to increase the operating revenue generated from lease operations,” said Ibrahim Al Soqabi, the group chief executive.

The increases in the fair value of investment properties and in gross profit from property sales last year were offset by an increase in financing cost, sale of associates and joint ventures, and other expenses, the company said.

“We believe that Mazaya’s ongoing development project, Queue Point/Queue Line Liwan in Dubai, has the right offering, catering to the mid-income segment; this, in our opinion, should help Mazaya generate relatively good demand in a broadly soft market,” said NBK Capital. “Furthermore, the company’s rental property portfolio in Kuwait and Dubai remains strong, with almost full occupancy.”

Al Mazaya, which is listed in Dubai and Kuwait, plans to expand in the Arabian Gulf and Turkey, and is evaluating projects in those areas, Mr Al Soq­abi said.

With regard to its borrowings, the property developer said it had converted all its borrowings into Sharia-compliant financing last year as part of a five-year borrowing plan.

“Al Mazaya has successfully accomplished one of its key objectives for 2015 – converting all its loans into Islamic financing. These facilities will be used in new investment opportunities that will drive growth in accordance with the corporate strategic plan,” said Mr Al Soqabi.

Al Mazaya said its financial facilities’ maturities have been structured into medium and long-term structures, cutting financing costs and reducing fin­ancial obligations.

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