Kuwait real estate firms still see pressures

NRE saved losses by selling subsidiaries

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Kuwaiti real estate and investment companies remain unsteady overall from a weaker currency and a decline in sale values as the government announces a KD5 billion package for the economy.

National Real Estate Company managed to remain in the black after selling many of its subsidiaries. The company made KD4.03 million from offloading satellite companies as its operating profit fell by almost KD5 million (KD6.475 million down to KD1.648 million) between the first quarter of 2010 and the same period last year.

Mandatory contributions to the Kuwait Foundation for the Advancement of Science (KFAS), the National Labor Support Tax and a contribution to Zakat – all introduced since last year – ate away at profits, as did a KD20,000 loss on foreign exchange.

The value of its investments in properties also took a bigger hit than last year when calculated by ‘fair value’ - current market price as if they were about to be sold – losing KD1.2 million compared to KD1.16 million a year ago.

The company still managed to post a profit of KD5.865 over KD5.826 million – bolstered by the subsidiary sales. Its stock has declined from KD236 to KD198 per share in three months.

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Kuwait Commercial Markets Complex Company – which has controlling stakes in Al Modon Aloula Real Estate Co., Al Shouwaikh United Real Estate Co., and Masqat and Kuwait Co., among others – saw a KD265,459 loss from foreign exchange transactions and a net loss from investments available to sale of more than KD36,000.

Though operating revenues and gross profits all edged above last year, it made no gain on the sale of land and properties held for trading.

Yesterday the secretary general of the Supreme Council for Planning and Development told Bloomberg that KD5 billion was earmarked for the economy. Adel al-Wuqayan added that KD2.8 billion of this would be devoted to non-oil sector, which he said would kick-start an expected KD30 billion of investment in the country overall – KD15.4 billion would come from the private sector.

In Riyadh, the Tadawul Exchange announced that shares recently released in an initial public offering by Al Hassan Ghazi Ibrahim Shaker have been deposited in investors’ accounts. The company is the sole distributor of LGe Air Conditioners in the Kingdom.