Al Akaria 2018 loss won’t impact future investments, cash flows: MD

Saudi Real Estate Co's (Al Akaria) net loss of SAR 183 million for fiscal year 2018 was mainly due to the implementation of IFRS 9 which resulted in setting risk provisions especially those related to financial instruments, Managing Director Ibrahim Al-Alwan told Argaam.

Conducting risk studies and deciding to set provisions took more time from the external auditor, which led to adding SAR 240 million worth of provisions for asset impairment to 2018 financial statement, he said.

The loss will not impact the firm’s future operating revenue, operations, investments or cash flows, Al-Alwan said.  

Al Akaria aims to concentrate investments and diversify sources of income from various property activities. The firm also plans to benefit from the supporting services of its subsidiaries, which are expected to impact its results in the coming periods, he added.

According to data compiled by Argaam, Al Akaria posted a net loss of SAR183 million for fiscal year 2018, compared to a net profit of SAR 132 million a year earlier, while Q4 2018 reported a SAR 270.6 million loss.

The reality firm’s board of directors has decided to withhold its recommendation for distributing cash dividend for fiscal year 2018 due to the decline of retained earnings.

In January, the board recommended a 5 percent cash dividend for 2018, at SAR 0.5 per share, amounting to SAR 120 million.