NREC CEO Samuel Sidiqi.

KUWAIT: National Real Estate Company (NREC), a leading regional asset manager and developer with development projects exceeding $ 1 billion in both Egypt and the UAE, yesterday released its financial results for the first half of 2016. The company recorded growth in top-line earnings of 52 percent and a net profit KD7.6 million.

Revenue growth was driven by income generating assets in Kuwait, Jordan and Egypt, where NREC is developing a 3.8 million square meter residential community. The company is also developing Reem Mall, a two million square foot major shopping destination in Abu Dhabi. Reem Mall will house more than 450 stores including 85 restaurants, a large hypermarket, and family entertainment zones that include the world's largest indoor snow-play park.

H1 2016 Financial Highlights

Operating Revenue: KD14.9 million, up 52 percent from H1 2015

EBITDA: KD9.6 million, down 4 percent from H1 2015

Net Profit to shareholders: KD7.6 million, down 1 percent from H1 2015

Earnings Per Share (EPS) of 8.49 fils

Q2 2016 Financial Highlights

Operating Revenue: KD7.6 million, up 37 percent from Q2 2015

EBITDA: KD5.1 million, down 8 percent from Q2 2015

Net Profit to shareholders: KD4.0 million, down 10 percent from Q2 2015

Earnings Per Share (EPS) of 4.44 fils

NREC CEO Samuel Sidiqi said, "We are pleased to report record revenues for the first half of 2016 with our income generating properties in Kuwait, Jordan and Egypt performing well despite regional macroeconomic challenges. In Kuwait, rental income was KD5.3 million, up 4 percent from the same period last year. NREC Misr continues to perform well, generating half of our H1 2016 revenue. At Grand Heights we have sold 791 units since inception representing a cumulative sales value of EGP2.55 billion.

In Abu Dhabi, Reem Mall has acquired all necessary government approvals and enabling works are currently being completed. We are in the final stages of tendering the remaining works and are pleased to have selected Al-Futtaim Carillion as the project's preferred tenderer for construction. Al-Futtaim Carillion has a strong reputation and track record in delivering high quality retail projects in the region including Dubai Mall and Deira City Centre. Our leasing program is on track and continues to exceed expectations.

We maintain our positive outlook for the rest of 2016 driven by continued healthy performance in our core markets."

H1 2016 regional business highlights

* Kuwait: The Kuwait commercial and retail portfolio continues to be a consistent strong source of recurring revenues with rental income growing by 4 percent from the same period last year to KD 5.3 million. NREC has six properties in Kuwait, with Souq Sharq being the company's primary asset.

* Jordan: The company recorded rental revenue of KD405,000 representing an increase of 3 percent from the same period last year. NREC's primary asset in Jordan is the 1.5 million square-meter Aqaba Warehousing and Industrial Park.

* Egypt: Grand Heights sold 791 units since inception, representing cumulative sales of EGP2.55 billion. Egypt revenues contributed nearly half of H1 2016's operating revenues.

*Handover of Phase 1 units commenced in Q1 2016 and the project is scheduled to be completed in 2021 with total projected revenue of EGP11.2 billion for the project. The company plans to deliver 150 units in 2016.

* UAE: After the start of enabling works at Reem Mall in Q4 2015, we are in the final stages of tendering the remaining works and are pleased to have selected Al-Futtaim Carillion as the project's preferred tenderer for construction for the billion dollar development project.

* Leasing interest is exceeding company expectations. NREC is currently engaged in discussions with retailers for more than 70 percent of the total space.