ALARGAN shareholders approve 10 pct cash dividend for 2015

Company posts KD 16.7 million net profit; EPS 65.32 fils

KUWAIT CITY, May 24: ALARGAN International Real Estate Company today held its Annual General Meeting (AGM) for the fiscal year ending in Dec 31, 2015, during which Shareholders approved the Board’s recommendation to distribute 10% cash dividends (10 Fils per share at nominal value).

Speaking at the AGM, Haitham Al-Khaled, Chairman of the Board of Directors of ALARGAN International Real Estate Company, said: “2015 has been a year of forward movement for ALARGAN, as it delivered on its strategy to grow both geographically and in the product mix, in an aim to deliver a sustainable business that will place the Company among the leading real estate developers, providing life-enhancing solutions in the region.

“The successful implementation of our strategy in 2015 demonstrates our commitment to our shareholders and the communities we impact to deliver on our motto, “Life… As You Love It,” through which we deliver a product for all stakeholders to enjoy and benefit from in the long-term.

“In achieving that, we chose to leverage on our proven track record in building life enhancing middle-income communities across the region. We’ve also adopted a new strategy to operate through a combined developer and investor business model. This enabled us to enhance our portfolio and diversify investments to minimize risks and ensure a recurring stream of income.” 2015 Financial Highlights The Company announced KD 16.7 million in net profit for 2015, a 259.34% increase over 2014. Earnings per share (EPS) increased from 18.17 Fils per share in 2014 to 65.32 Fils per share in 2015, despite a decrease of KD 5.3 million in the value of real estate investment properties in 2015. ALARGAN International’s total revenue increased by 73.8% to KD 45.9 million in 2015, while liabilities decreased by 19.16% from 2014, banking facilities decreased by 31%, and equity attributable to the parent company rose by 17%.

The significant increase in net profit was mainly driven by a gain of KD 26.4 million from selling 92.5% of total shares owned by a real estate fund which is fully-owned by the parent company and its subsidiaries, in an associate company in Saudi Arabia. The transaction comes as part of ALARGAN’s strategy to exit mature investments and restructure its real estate portfolio. 2015 Operational Highlights In 2015, ALARGAN International launched the internationally renowned and award winning project “ARGAN Village” in Bahrain, a development which redefines architecture and the overall community offering in a mixed used property. ARGAN Village brings both the modern and traditional Bahrain together in an urban village that offers a unique setting, comprising a redeveloped public garden surrounded by retail and food offerings. This project reflects ALARGAN’s standard model of providing a better, more distinguished lifestyle provided to its clients.

In the Sultanate of Oman, the Company also developed approximately 290 housing units across its various projects, as well as began construction on its highly lauded Oman Integrated Tourism Complex development, Al Nakheel.The Al Nakheel project is a 500,000 square meter development situated on the gorgeous coastal area of Barka.

As part of its new strategy to operate in a combined developer and investor model, ALARGAN undertook investments in funds both in the United Kingdom and the United States of America, helping the Company diversify its investment portfolio on both categorical and geographical levels without losing sight of its core business to deliver affordable middle-income homes

“This shift in strategy has aided ALARGAN in establishing a larger portfolio of assets that generate recurring revenues,” explained Khaled Al-Meshaan, ViceChairman and CEO of ALARGAN International. “This portfolio shift reinforced the Company’s financial strength and allowed exceptional dividends, in addition to helping ALARGAN weather any upcoming turbulence in the region, and internationally, related to the drop in oil prices and geopolitical dangers and their subsequent effects on assets.”

Within ALARGAN’s portfolio of revenue generating assets, the Company maintained a stable level of operational activities for revenues from rents and resorts, with net profit from rental income and operations reaching KD 6.4 million in 2015. Rating ALARGAN International affirmed its bond rating at “BBB-”, and had the bond’s Outlook raised to ‘Positive’. According to Capital Intelligence, the international credit rating agency assigned to rate the KD 26.5 million, five-year bond, ALARGAN continues to enjoy a sound financial profile, a geographically diversified business model, and a good funding structure with little reliance on short-term borrowing, further affirming the Company’s solid strategy. Outlook Moving forward, ALARGAN continues to develop its new Salmiya commercial project, “ARGAN Square. “The project is expected to be an important addition to the group’s stable income generating assets. Similarly, it has begun development on a commercial complex located in Shuwaikh area in Kuwait, serving the surrounding areas.

Commenting on ALARGAN’s future, Al-Meshaan said: “Our strong financial position and operational performance is proof that the Company is well positioned to weather through regional uncertainties to deliver quality products that meet the present needs of our communities. ALARGAN is planning to repurchase a portion of its Bond, scheduled to mature in April 2017, as part of its continuous efforts to optimize the use of its cash flows and exploit prudently the available cash surpluses.

“We are also considering entering North African markets, as we believe that the macroeconomic fundamentals in these markets are attractive and show high demand for middle-income housing. Developing for middle-income communities remains our focus, as it is a significant segment that we have successfully served, and continue to do so as to meet the upward trend of demand.”

ALARGAN International Real Estate Company is a leading real estate company based in Kuwait and focused on the development of affordable and middle income housing in the GCC. The company strives to integrate its motto, ‘Life… As You Love It’, across its projects by creating “live, work, play and savor” environments that present a unique lifestyle experience. The company also endeavors to pass on its sustainability values to the community by including green and energy efficient initiatives in its projects.

The company is the first in Kuwait to have obtained Platinum ranking, the highest, in the Leadership in Energy & Environmental Design (LEED) program, which is awarded by the US Green Building Council (USGBC). ALARGAN follows a balanced investment strategy, and seizes opportunities with stable and superior returns based on the market’s investment cycle. Its projects are diverse and located across the Gulf region, including the State of Kuwait, the Kingdom of Saudi Arabia, the Kingdom of Bahrain and the Sultanate of Oman, and cover popular hotels resorts, widely visited shopping and food destinations, large development communities, and middle income level residential housing.

(Left to right): Dr Ali Owaid Rukheyes, Al Waha Auditing office; Walid Sayed CFO, ALARGAN; Khalid K. Al-Mashaan, ViceChairman & CFO, ALARGAN; Haitham S. Al Khaled, Chairman, ALARGAN; Dr Shuaib Abdulla Shuaib, RSM Al Bazie and

Co and Bodour Jarrag, Ministry of Commerce and Industry.