Kuwait’s URC posts net loss of $30m in 2018 despite revenue surge

Listed developer attributes decline in operating profits to reduced values of its properties in Kuwait and the UAE

Hessa Towers is one of URC's projects.
Supplied
Hessa Towers is one of URC's projects.

Kuwait bourse-listed United Real Estate Company (URC) has revealed that its 2018 operating revenues grew to $338.6m (KWD103m), 18.4% higher than corresponding 2017 figures of $286m (KWD87m).

However, the developer recorded a net loss of $29.6m (KWD9m) in 2018, a significant decline compared to 2017 net profits of $7.2m (KWD2.2m).

Operating profits at URC stood at $29.6m (KWD9m) in 2018, a 57% decline from 2017's $69m (KWD21m).

URC's decline in profits was attributed to several factors, including declining properties value in Kuwait and other countries such as the UAE; and a surge in annual amortisation of build–operate–transfer (BOT) investments due to the near-end of these investments.

Acting chief executive officer of URC, Ahmad Kasem, said that the company's revenues from its contracting and services businesses increased by 19% during the year, with profits from these sectors surging by 73%.

According to Kasem, the company is planning to diversify its income streams through its contracting and services businesses.

In December 2018, URC began construction on Phase 1 of two-building Hessa Towers project, which is expected to complete in 2022. With a total built-up area of 6.3ha, each tower comprises 40 floors with apartments ranging from duplexes- and- townhouses. 

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