Press Release

For immediate release:

Kuwait, 01 April 2011

Al Mazaya Holding has announced its financial results for the year ended 31 December 2010. According to the company’s annual financial report, its total revenues reached KD 11,240,009, including operational revenues of KD 4,475,217 and other income of KD 6,764,792, while its provisions totalled KD 13,912,554. Al Mazaya’s results recorded a loss of KD 8,609,812, after deducting other expenses, and its earnings per share amounted to 18.45 fils. The announcement of the results followed a Board of Directors meeting held at the company’s headquarters yesterday (Tuesday) afternoon, and chaired by Al Mazaya Chairman Rashid Yaqoob Al Nafisi, with Deputy Chairman Fahad Al Ibrahim and Board members Abdul Aziz Al Lugani, Fahad Al Atiki, and Mohammed Al Othman in attendance. Commenting on the results, Al Nafisi said: “Al Mazaya was able to maintain its financial standing, operational performance and market position thanks to careful planning and the implementation of the firm’s precautionary 2010 policy, which took into consideration both the general economic climate and recent financial developments in the global markets. “Al Mazaya did everything possible to maintain its relative stability throughout 2010, and total assets at the end of 2010 amounted to KD 335,256,000, while shareholders’ equity amounted to KD 115,707,927 million and bank debts reached KD 55,471,145, which represents only 17 percent of total company assets and 48 percent of total shareholders’ equity,” he added. He stated that neither the company’s financial results nor its share value reveals its true performance, or its ability to develop and progress, highlighting that the current challenge for many companies is simply to stay afloat. He further mentioned that it is the companies who were able to weather the storm during the financial crisis that continue to contribute to national development. According to Al Nafisi, due to the ongoing economic challenges in most regional markets, particularly the Dubai markets where Al Mazaya has numerous investments and projects, the firm was forced to carry over allotments from the year ended 31 December 2010 to support its performance in 2011. This was necessary given that a number of investors in the Dubai market defaulted on their payments despite the company having completed large sections of its projects, including its Business Avenue Towers at Jumeirah Lakes (100% complete), and phase one of ‘The Villa’ residential project (100% complete) and the Liwan project (50% complete), both located in Dubailand. He explained that Al Mazaya has successfully completed the re-structuring of its assets and paying off all liabilities through assets liquidation and swap, and that the firm is currently collecting all outstanding amounts from sales in its projects, making payments for construction work according to the percentage of work completed, and acquiring all the defaulted residential and office units in accordance with Dubai’s acquisition regulations. This will add to Al Mazaya’s assets and financial results, as its current plan – to complete and deliver projects currently under development – includes these assets in the list of income-generating projects or projects available for sale. Al Nafisi said that completion rates for Al Mazaya’s Kuwait projects are 100 percent, including the ‘7 Zones’ project in the Al Shuwaikh Industrial Area, which has been sold to Kuwaiti investors, generating liquidity of KD11 million that will be used to help fund the company’s expansion plans. In addition, Al Mazaya has commenced operations in the medical sector through its Clover Clinic project, 70 percent of which has already been leased, and the firm plans to offer its towers in Kuwait Business City for lease later this month, once power supply has been finalised. First Dubai acuisition “2010 saw Al Mazaya’s successful acquisition of 93 percent of First Dubai Real Estate Development Company, a Kuwaiti shareholding company listed on the Kuwait Stock Exchange with paid-up capital of KD100 million, and KD107,205,124 total assets, including Sky Gardens, the state-of-the-art residential landmark located in the heart of the Dubai International Financial Centre (DIFC) with a stunning view of the Burj Khalifa,” said Al Nafisi. He went on to explain that Al Mazaya previously sold 60 percent of the project and invested the remaining 40 percent through offering residential apartments for lease “The acquisition of First Dubai has helped us to reduce administrative expenses through merging various departments at the two companies, and this is expected to lead to an increase in operating revenues and profits by the end of next year,” he said. Regarding Al Mazaya’s plan to operate mega income-generating projects in Kuwait, KSA and Dubai, Al Nafisi said that the firm expects additional annual revenues beginning in the first quarter of 2011, as five income-generating projects were completed in this period. Al Mazaya is also currently offering the three towers Al Ma’thar Office Towers in Riyadh, KSA, for lease. Top 50 developers Al Mazaya Holding was listed among the GCC’s top 50 most admired companies by Construction Week magazine in its developers’ category, in recognition of the real estate milestones Al Mazaya achieved during the global economic crisis, and of its mega projects in Kuwait and abroad. In looking at those developers that best survived the upheaval and can look at the second half of 2010 with the most optimism, Construction Week reported: “Though we have seen in recent years how a developer’s vision can be cut down by the whims of a globalised marketplace, it is the developers that truly transform landscapes and define the future opportunities for residents and new inhabitants.” 2011 leap Al Nafisi explained that Al Mazaya has an ambitious plan in place for 2011, launched after receiving the Board of Directors’ approval for the 2011 budget, which aims to cut costs by 35 percent compared to the 2010 budget. Alongside this cost-cutting plan is an operational plan based on offering the best real estate products to the market through the operating and leasing programme of Al Mazaya’s income-generating projects. The company will establish internal departments – a Properties and Maintenance Department, and another Customer Service Department to further develop service levels – and form three Board committees: one to follow up the company’s financial and real estate investments, a second for internal auditing to ensure the smooth functioning of the cash flow as per the approved budget, and a third to deal with personnel affairs. Al Nafisi concluded by stating that Al Mazaya is conducting a number of studies for new property projects in Kuwait and the Middle East, adding that these projects will see light in the second half of 2011, after the company’s income – and the GCC markets – has stabilised.