Some project contracts on track to be signed; impact to reflect as of H2 onwards: Retal CEO

Retal CEO Abdullah Albraikan

Retal Urban Development Co. is on track to sign contracts for various projects that will reflect positively on financials for the second half of 2023 onwards, CEO Abdullah Albraikan told Argaam exclusively.

Retal achieved many developments in terms of operational performance, as work began on three new projects during the second quarter of 2023. Further, development work began on two real estate funds, part of six in total. The company contributes to four of these funds, alongside its role as the exclusive developer and marketer of these funds, the top executive noted.

Additionally, according to Albraikan, Retal managed to boost its market share in geographical areas with high demand and purchasing power. The company launched sales for 327 property units in the Jeddah-based Sadayem suburb development over several phases, at a total value of SAR 418 million.

During the first quarter of this year, the company also succeeded in logging record sales following the launch of the Riyadh-based Al-Fursan suburb project, he continued.

Record results also came amid growth of real estate development revenues, which doubled after the number of ongoing projects increased from four in Q2 2022 to 11 projects by the end of the second quarter of 2023. The number of properties sold also doubled year-on-year (YoY) in the first half of 2023, despite the challenges facing the real estate market on high interest rates, Albraikan elaborated.

According to the CEO, Retal is moving forward at a steady pace to meet its strategic growth targets and raise its market share, mainly in the residential sector. This is in addition to its qualitative partnerships with real estate funds within the framework of achieving goals set for the Kingdom’s real estate sector under Vision 2030.

Earlier, Retal’s board decided to distribute a 16% cash dividend, or SAR 0.16 per share, to shareholders for the first half of 2023, with total dividends distributed amounting to SAR 80 million.

Retal achieved SAR 71 million in net profit in Q2 2023, a YoY increase of more than 136%, as revenues from development contracts jumped by more than three-fold YoY during the same period.

Q2 earnings were further amplified by Retal’s share of results from equity-accounted investments, which came in at SAR 40.8 million versus SAR 6.9 million in Q2 2022.

Financial results also showed that the company achieved earnings before interest, taxes, depreciation, and amortization (EBITDA) of SAR 97.6 million during the second quarter of 2023, a YoY leap of over 141%. This, in turn, lifted the EBITDA margin by 6.9% to 37%.

The table below shows the company’s key income indicators:

Sectoral wise, development contract revenues accounted for 87% of the total after amounting to SAR 227.9 million in Q2 2023, compared to SAR 74.2 million in the year-ago period, as shown below: