Al Akaria Saudi Read Estate Company, which is majority owned by the kingdom’s wealth fund, posted a 46.2 per cent increase in the second-quarter net profit, boosted by revaluation of derivative financial instruments and lower finance costs.
Net profit for the three months ending June 30 rose to 30.3 million Saudi riyals (Dh29.68), the company, known as Sreco, said in a statement on Monday. The revaluation of derivative financial instruments amounted to 5.4m riyals for the period compared to losses of 6.3m riyals a year earlier, it said.
Finance costs for the Riyadh-listed company, which is 65 per cent owned by the Public Investment Fund, fell 52.6 per cent during the second quarter, Sreco said.
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[ Saudi Arabia’s Al Akaria to build ‘city’ costing 10bn riyal for first phase ]
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“Our strong financial performance for the second quarter of 2018 reflects the successful execution of our strategy ... which provides necessary foundations from which to build a new era of integrated lifestyle communities,” said Mamdouh Al Sharhan, the chief executive of Sreco.
The company said earlier this month it planned to build a mixed-use “city” outside Riyadh, with the first phase of the development costing 10 billion riyals.
Sreco is one of the biggest real estate companies listed on the Tadawul stock exchange with a market capitalisation of 3.5bn riyals. It announced in July the establishment of a fully owned subsidiary called Al Widyan Holding to develop the Al Widyan mega-project.
The city will span 7 million square metres of land in the northern growth corridor of Riyadh close to the airport. Al Widyan will be the first private real estate project in the kingdom granted the status of a self-regulating authority, or Self-Regulatory Office, which is similar to a commercial free zone in other countries. Such a status de-risks the project for investors, fast-tracks permit services and removes other bureaucratic processes.
