Barwa profits hit QR487 million as sales continue

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Barwa Real Estate saw its pre-tax profit rise more than QR100 million for the first half of this year compared to the same period in 2009, with profits on the sales of key properties up more than 50%.

The developer of Barwa City and in Doha posted profits of QR487.4 million, up 31% against the QR377.8 million for the January-to-June period last year. Total revenue included an increase in profit on property sales from QR87 million to QR131.1 million.

After-tax profits rose 31% to QR495.9 million, although its net cash position was more than QR1.1 billion in the red following unconditioned income from discharge of borrowings and a QR817 million loss on the fair value adjustment – properties marked-to-market as if they were to be sold – of investment property, among other liabilities.

Barwa Real Estate is the property development arm of Barwa Group. It has a number of subsidiaries that aim to capitalise on investment opportunities around the Middle East as well as Europe.

Last month it was revealed that the company entered a financing agreement for the US$ 1.35 billion Barwa City development with the finance arm of Qatari Diar, a fellow developer, which also includes the real estate projects of Barwa Financial District WLL and Barwa Commercial Avenue Company. By the end of the month it had secured the first US$3.5 billion, which follows Islamic murahaba principles.

This summer it has handed out big contracts for the contruction of Barwa City, including a QR676 million contract to INdian firm Shapoorji Pollonji to build the Phas e 1 amenities, which inludes 13 buildings.

Income from properties under development for the group rose 31% to QR19.1 billion.

Yesterday company closed down 1.63% to QR30.1 per share on the Qatar Exchange in Doha, slipping from QR31.4 from last Tuesday. Its stock has nevertheless surged since the start of this quarter from QR28.6 at the beginning of June. The analyst team at TAIB Securities recommended an ‘overweight’ position on the company on 5th July.