Saudi Arabia’s Tadawul-listed real estate development company Alandalus Property posted a 4.8% decline in Q1 2019 net profits, recorded at $6.3m (SAR23.6m), attributing the drop to higher operating fees and utilities costs for the food court of Alandalus Mall.
According to a stock market missive, revenues at the company remained flat at $10.6m (SAR40m) during Q1 2019, with the corresponding figure noted at $10.9m (SAR40.8m) in Q1 2018.
Alandalus Property attributed the minuscule dip in the revenues to "a slight drop in occupancy" at the Staybridge Hotel in Jeddah, which is one of the assets within the company’s hospitality division.
Marginal growth in operating profit to $7.8m (SAR29.1m) was noted during Q1 2019, which Alandalus Property said was driven by a better approach to expense management, as well as due to growth from other revenue streams.
Net profit attributable to shareholders remained flat at $5.4m (SAR20.3m) in the first quarter of 2019, not much lower than the $5.5m (SAR20.5m) corresponding figure for Q1 2018.
Commenting on the quarterly results, chief financial officer of Alandalus Property, Fawaz bin Huwail, said: “It is worth noting that the slight drop in net profit attributable to shareholders is mainly driven by the initial impact from our adherence to IFRS 16 on leasing contracts.
“It is commonly understood that, in relative terms, the implementation of this new standard adversely impacts a company’s stated income – particularly in the earlier periods of a given lease contract.”
Alandalus Property has been busy in 2019. This March, it opened the Al Marwa Centre community mall in Jeddah, which comprises a hypermarket and 31 shops.
A joint venture between Alandalus Property and Al-Rajhi and Sons Investment Co, Al Marwa Centre has a gross leasable area 1ha, and an occupancy rate of 65%.
