Saudi’s Amlak International achieves 14.5% net income growth in FY19
“Tailwinds are providing impetus to the kingdom’s real estate financing sector, and we are at the forefront of development”
Saudi Arabia’s non-bank real estate lender Amlak International (Amlak) has revealed its financial results for the 12-month period ending 31 December 2019, showcasing net income growth of 14.5% year-on-year to $18.6m (SAR70m), with total revenues increasing 11% YoY to reach $78.66m (SAR296m).
The real estate lender’s total financing portfolio increased to $850.38m (SAR3.2bn) across the individual and corporate book, reinforcing the need for a diverse portfolio as a platform for growth.
Strong growth in new disbursements to individuals led to an increase in value of 90%, with the number of new contracts increasing by 119%. New disbursements to corporate customers increased by 28.5%. Amlak’s corporate lending book accounts for 69% of its total portfolio.
The firms’ full-year results included $4.4m (SAR 16.6m) in non-recurring charges related to zakat and tax settlements for prior years. FY2019 marked the first year in which the firm calculated zakat and tax based on GAZT regulations No. 2216 issued on 17 March 2019.
Amlak’s earnings before tax increased 4.6% year-on-year to $27.1m (SAR102m) in 2019.
Commenting on the firm’s performance, the chief executive officer of Amlak International, Abdullah Al Sudairy, said: “We have reason to be pleased with performance in 2019. A number of tailwinds are providing impetus to the kingdom’s rapidly growing real estate financing sector, and we are at the forefront of its development.”
Al Sudairy added: “The diversity and quality of our lending book has proved critical, enabling us to serve both corporate and individual customers while maintaining a healthy balance sheet and remaining committed to strict asset quality criteria, leading to best-in-industry delinquency ratios.”
During 2019, the company completed individual portfolio sales worth $81.58m (SAR307m) outstanding as of December to the Saudi Real Estate Refinance Company (SRC).
Al Sudairy continued: “We’re bullish on opportunities for growth across our portfolio, and we intend to take advantage of avenues created by Ministry of Housing programmes such as the REDF and the SRC. Meanwhile, we continue to add value to shareholders, with earnings per share of SAR 1.1 before Zakat for 2019.”
In 2020, the company will focus on capturing growing demand for individual financing, driven by government initiatives to encourage home ownership among Saudi nationals, while increasing lending to high-growth sector corporates, where rapid financing procedures coupled with competitive yields will drive income.
The strategy is built on a healthy balance sheet with significant headroom for growth, as 40% of its available credit of $956.6m (SAR3.6bn) is unutilised.
Amlak holds a 29% share approximately of the kingdom’s non-bank real estate financing portfolio, making it a key player in the market.