Press Release

For immediate release:
Kuwait,

Al Mazaya Holding held its regular general assembly meeting for 2011 at Clover Centre at Al Mazaya Tower in Al Jabriyah, yesterday morning, with a presence rate of ….%. The meeting was opened by Mr Rashid Yaqoub Al Nafisi, Chairman of Al Mazaya Holding in presence of Eng. Naif Al Awadi, CEO of the company, representative of the Ministry of Commerce and Industry, (……..) representative of Audit firm, boards members Mr Fahed Al Ibrahim, Vice Chairman, Mr Abdul Aziz Al Lougani, Mr Mohammed Al Atiqi and Mr Mohammed Al Othman, in addition to executive directors of the company and a number shareholders, investors, and media representatives.

Al Nafisi opened the meeting saying that 2011 was a year of laying foundations for a new phase of achievements the company is looking forward to in the coming years, particularly following the settlement of payment with owners and investors, including those whose payments had been defaulted or delayed. This step has helped to bring into play a number of deals and amendments which serve the interests of the company and investors.

He added that Al Mazaya managed to settle contracts worth $50 million with investors during 2011, negotiated other contracts worth $60 million, and reached solutions that protected the rights of investors and shareholders, alike, and were agreed on by all parties.

Al Nafisi presented all the items on the agenda of the general assembly and heard the report of the board of directors for the fiscal year ended 31 December 2011, which was approved by the assembly. The auditor report, the balance sheet and final accounts for the fiscal year ended 31 December were also approved during the meeting.

The assembly approved impairment accumulated losses of KWD 58105,339 through premium. The assembly approved, also, a proposal submitted by the Board of Directors to not distribute any dividends for the fiscal year ended 31 December 2011, the waiver of the board members’ remuneration for the fiscal year ended 31 December 2011, and the renewal of the mandate authorising the Board of Directors to sell and buy up to 10% of the company’s shares in accordance with Act No. 132 of 1986 and Executive Decree No. 15 of 1987 issued by the Minister of Trade and Industry, allowing the company to deal with concerned parties, discharge the members of the Board of Directors from liability for the fiscal year ended 31 December 2011, appoint or reappoint auditors for the fiscal year 2012 and authorize the board of directors to determine the amount of remuneration to be paid to auditors.

Financial statements

Al Nafisi added that the company’s total assets amounted to KWD 261.7 million, while equity attributable to shareholders amounted to KWD 81.6 million and bank debts reached KWD 53.97 million, which represents only 21% of total company assets and 62% of total shareholders’ equity.

He said Al Mazaya did everything possible to maintain its relative stability throughout 2011, adding that operational revenues reached KWD 87.7 million, other revenues were KWD 520 thousand and the total revenues amounted KWD 88.2 million.

He stated that neither the company’s financial results nor its share value reveals its true performance, or its ability to develop and progress.

After approving the items of the general assembly’s agenda, Al Nafisi closed the meeting amidst the common consent of all attendees. Later, Eng. Naif Al Awadi, CEO of Al Mazaya Holding, accompanied by Eng. Salwa Malhas, Mazaya’s Executive Vice President for Business Development, Real Estate Management and Marketing and Mr Ayman Sheit, Mazaya’s Executive Vice President for Financial and Investment Affairs, opened the Financial Analyst Meeting, stressing the need for the market, shareholders, investors and media to identify the company’s current strategy and its future vision in terms of investments and projects. This step aimed at boosting confidence among investors and shareholders and further strengthening the company’s leading position.

Al Awadi began the Financial Transparency Conference by giving overview of the company’s current strategy and its future goals, emphasizing the leading role of the board members, executive management and all employees, and accentuating that Al Mazaya team will spare no effort to boost the company’s position in the local and GCC market by offering the best products and services.

Al Awadi reviewed the company’s strengths and weaknesses, stressing that the most important strengths are the company’s track record of achievements in more than one market and real estate sector, the experience of the executive management and employees, and the confidence of investors and contractors among many others. And that Al Mazaya seeks to redistribute its projects geographically to ensure safety of its portfolio of projects in more than one market.

Al Awadi said that many investment opportunities exist in education, healthcare, retail, industry and housing sectors, while there is market risk which may threaten any company, due to the low rent prices, availability of many competitive products in the market, and declining investor’s confidence.

Al Awadi continued presenting Al Mazaya’s dynamic achievements, stressing that Al Mazaya was able during 2011 to finalize a number of settlements, including the settlement of the Oman portfolio, acquisition of the Al Mwaleh plot of land in Muscat and settlement with UAE based Tamweel. These settlements have enhanced cash generated from sales in the Villa residential project. He added that agreements were signed with contractors to reduce value of contracts and financial obligations. The company has, also, finalized settlements with 5000 clients.

Al Awadi remarked that these achievements have been reflected on the financial results. The operational profits have increased from KWD12 million in 2010 to KWD 87.7 million in 2011. Total profit jumped from KWD 3.9 million in 2010 to KWD 27.5 million in 2011.

Al Awadi presented the highlights of Al Mazaya’s projects for the next five years. He concluded that Al Mazaya will shift from focus on one region to various markets and from one work model to various work models, including sales, income generating projects, management services, and government services.

Eng. Salwa Malhas presented three key points including the company’s current market value which has not been impacted by the crisis, as the company continued to register its trademark in regional markets. The company owns intellectual rights in Kuwait, UAE, Qatar, KSA, Lebanon, Morocco and Bahrain and is planning to continually expand in this regard.

Eng. Malhas emphasized that Al Mazaya’s current model is working in accordance with research and studies conducted by the company on the GCC, regional and international markets. According to this research, Al Mazaya concluded to concentrate its operations in the GCC markets, due to the abundance of low risk, high ROI investment opportunities in this stable and financially prosperous region, where the demand for real estate development holds true.

Malhas added that Al Mazaya’s research included a detailed study of the education, healthcare, retail, tourism, industry, warehouses, and housing sectors, demonstrating the strengths and weaknesses in these sectors in various markets. She underlined that these sectors are vital and still not serviced well in the GCC markets.

On the other hand, Al Mazaya presented the company’s current operations, briefing the company’s revenues from its income generating projects, portfolio of projects offered for sale, the plots of land and the projects underway. Malhas said that the occupancy rate in the projects has increased despite the current market challenges. Units in Indigo Office Tower in Dubai, Clover Centre in Kuwait, and Al Mazaya Tower in Kuwait are 100%, 95% and 60% leased, respectively. This has helped create financial stability in the company and encouraged entry into similar projects in the future. Al Mazaya achieved 60% lease rate in Al Maathar Tower in the KSA and 95% in Sky Gardens in Dubai.

Malhas added that Al Mazaya has a portfolio of projects offered for sale in Dubai and multipurpose plots of land in Oman, Bahrain, Sharjah and Lebanon. The company is studying the feasibility of developing these plots.

In conclusion Malhas said that Al Mazaya’s strength lies in its strategic plots of land in various markets and its ability to develop various economically feasible projects according to careful execution plan. Such projects can be developed by securing appropriate financing instruments through partners, investors, funds or portfolios that enable the company to expand projects in terms of region, model and sector.

Mr. Ayman Sheit spoke about the company’s strong balance sheet, saying that the book value per share is 140 Fils and that 99% of the profits are operational. He presented the progression of assets, shareholders’ equity and capital growth from 2008 to 2011, saying that the assets have declined in 2010 and 2011 due to delivery of many sold projects. “This is in proportion with reduction in financial obligation. The shrinking assets are result of declining prices in real estate market. Due to this situation, we had to take allocations which led to the reduction in total assets”, he clarified.

Sheit added that the company’s assets are calculated at KWD 262 million, 42% of which are ready projects, 20% underway projects, and 8% plots of land in addition to various assets and investments.

According to geographical distribution of Al Mazaya’s assets, Sheit said that 62% of these assets are in the UAE and 31% in Kuwait. The assets in the UAE have decreased from 78% of Al Mazaya’s total assets in 2007 to 62% in 2011.

Sheit clarified that KWD 85 million of the company’s operational profits in 2011 is from sale transactions, KWD 1.5 million from income generating projects and KWD 1.25 from management services, saying that this affirms the company’s stable income. He added that the company’s allocation was KWD 40 million in 2011. He said that the company managed to collect over KWD 86 million from real estate sale transactions and has used this amount to complete the company’s projects and to reduce its liability. Sheit clarified that the company’s liability has decreased by 38% as a result of delivering many projects and restricting loans from short to long term.