Net profit for Kuwaiti real estate giant Al Mazaya Holding has dropped by 30% amid a strategy to optimise costs.
Net profit of $4.4m (KWD1.35m) in Q1 2018 was lower than the $6.3m (KWD1.9m) recorded in the same period a year ago, albeit the decline is from a small base.
Al Mazaya said that efforts to optimise costs had driven operating revenue of $18.6m (KWD5.6m), which was approximately two thirds lower than its Q1 2017 revenue of $49.4m (KWD15m).
Group chief executive offer, Eng Ibrahim Abdul Rahman Al Saq'abi, said in a financial statement that the business had “managed to maintain a balanced operating performance and net profits”.
He did not mention why net profits and revenue had recorded double-digit decline when comparing Q1 2018 with Q1 2017.
There was some joy for Al Mazaya, though, with rent revenue rising by more than 5% to $6.5m (KWD1.98m).
Al Saq'ab said the group had been able to retain “high occupancy rates” in Sky Gardens in Dubai International Financial Centre, and Al Mazaya Towers in Kuwait, as well as properties in Saudi Arabia and the UAE.
Profit was generated by the sale of units in buildings including Dubai’s Q-Point, and Mazaya Residence, Oman.
Progress was made on a number of construction projects during the quarter.
Work started on the Al Mazaya Residence Phase 2 in Oman, which consist of 132 residential and retail units. Phase 1 is already completed and a handover is scheduled for the current quarter.
Schematic design for Mazaya Downtown in Al Sharq has been completed by Kuwait-based architecture and design firm Pace. Al Mazaya is yet to secure a construction license from the necessary authorities to build the project.
Concept design for the project was completed by London-based Gensler.
Al Mazaya said it also signed an investment contract to manage its third project at the Mazaya Clinic. This consist of 25 floors and 4,000m² in Bneid Al-Qar, a suburb in Kuwait City.
Looking ahead, Al Saq'abi said the company was “considering a number of investment opportunities” in global markets, particularly Europe, as part of the group’s international expansion drive. He did not disclose the type of investments the Al Mazaya may look to make in Europe, home to the world's largest single market.