Al Akaria incurs SAR 73.7 mln loss in H1 2023, SAR 82.5 mln in Q2

Saudi Real Estate Co. (Al Akaria) swung to a net loss of SAR 73.7 million in H1 2023, against a net profit of SAR 15.9 million in H1 2022. Revenue dropped 14% year-on-year (YoY) due to lower revenue from residential unit sales and a decline in the gross profit of subsidiaries, which recorded extraordinary losses of SAR 46 million in a project carried out by the subsidiary, Tamear.

During the six-month period, selling and marketing expenses increased by SAR 3.1 million YoY, on higher provisions for expected credit losses. Further, finance costs (FCs) rose SAR 61 million YoY on higher interest rates.

In Q2 2023, the company turned to a net loss of SAR 82.5 million from a net profit of SAR 45.3 million in the corresponding period of 2022. Revenue fell by 40% YoY, as a result of a drop in gross profit of subsidiaries and revenue from residential unit sales.

During the three-month period, selling and marketing expenses climbed by SAR 14.2 million YoY, on a rise of SAR 9.9 million in the provisions for expected credit losses. Further, FCs added SAR 23.7 million YoY on elevated interest rates.

The company reported negative results this quarter versus a net profit of SAR 8.87 million in Q1 2023, hurt by a 10% quarter-on-quarter drop in revenue. Operating expenses increased by SAR 5.6 million on a quarterly basis.

Shareholders’ equity, no minority interest, stood at SAR 4.57 billion by the end of the six-month period, up from SAR 4.51 billion a year earlier.

Accumulated losses reached SAR 209 million as of June 30, 2023, representing 5.6% of the company’s capital.

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