Jabal Omar may pay dividends if liquidity improves, says CEO

Jabal Omar Development Co. reported strong results in its last quarter, driven by revenues from the sale of residential units in Phase II of its Makkah project, chief executive officer Yasser Al-Sharif told Argaam.

“Jabal Omar’s annual profit increase is attributed to higher revenue from selling residential units in addition to higher proceeds from hotel operations,” Al-Sharif said.

He said the Saudi developer may consider paying dividends in the near future, if it maintains profitability and secures enough liquidity to meet operating requirements.

Looking forward, Al-Sharif said the company is currently working to secure various sources of cash to eliminate its bank liabilities and to help fund its Makkah project. The developer currently has SAR 12.6 billion in liabilities.

The company also plans to launch investment products, such as real estate funds and sukuk, develop available-for-sale, pay-to-own real estate products, and introduce off-plan sales models.

Jabal Omar will “soon” open its Hilton Makkah Convention Hotel in Phase I, raising the number of the 5-star hotels in the area to five.

Phases II, III, IV of the project are scheduled for completion in 2018. Phases V, VI, VII will be developed into a mixed-use complex that will include commercial centers, hotels, and residential units. Design construction plans are expected to increase the number of units near Al-Masjid al-Haram Mosque, Mecca to boost quality and growth.

The developer posted a net profit of SAR 79.3 million in the first quarter compared to a loss of SAR 75.5 million last year. Profit during its last quarter— which is considered Q1 since it follows the Islamic fiscal calendar—was down 88.5 percent quarter-on-quarter. Sales and revenue in Q1 were slightly lower when compared to the previous quarter. 

Al-Sharif attributed the quarter-on-quarter profit drop in Q1 to slightly lower revenues from units sold.