Jabal Omar sees bigger loss at project outset
Outgoings increase as Makkah development remains at starting line
Jabal Omar Development Company, the Saudi real estate firm, saw net losses soar last year against 2009 figures as its main project in Makkah is still far from producing returns.
The developer, which also has business lines across construction, saw an after-tax loss of SAR 37 million, faling a further 61% against the loss of SAR 22 million in 2009. Losses per share reached 5.5 Hallals against 3.4 Hallals the previous year.
The company is developing a multi-billion mixed use project in the Holy City that will feature three luxury hotels, hundreds of shops and air-conditioned prayer facilities for 100,000 worshippers, as well as housing, close to the Grand Mosque.
The company was set up by Makkah Construction & Development Company, a developer that posted a 39% rise in net profits for the first nine months of 2010, specifically for this project, which has seen significant delays linked to fund raising. In December 2010 Jabal Omar signed an SAR 3.4 billion contract with Nesma & Partners Contracting Company to build the first phase, which is scheduled to take 24 months to complete.
The company stated that it has no operating profits due to the early stage of the project, and has also seen a rise in certain expenses as well as a “new strategy” for the project that is being implemented.