Al Akaria posts SAR 89.3 mln loss in 9M 2023, SAR 15.6 mln in Q3

Saudi Real Estate Co. (Al Akaria) turned to a net loss of SAR 89.3 million in the first nine months of 2023, against a net profit of SAR 27.9 million in the year-earlier period.

Al Akaria cited an increase in finance costs (FC) of SAR 77.7 million amid the sharp rise in interest rates during the period. Revenues declined by 9% year-on-year (YoY) amid lower revenues from the sales of residential units.

Further, the company’s subsidiaries recorded a decline in gross profits on incurring one-off losses of SAR 46 million in a certain project.

Selling and marketing expenses increased by SAR 11.9 million YoY on an increase of SAR 7.5 million in the provision for expected credit losses at a subsidiary.

In Q3 2023, the company sustained a net loss of SAR 15.6 million versus a net profit of SAR 12.1 million in Q3 2022. FCs increased by SAR 16.1 million amid higher interest rates.

Selling and marketing expenses saw a rise of SAR 8.8 million YoY, as the ECL provision increased by SAR 7.5 million. General and administrative expenses rose by SAR 6.2 million YoY, as Al Akaria’s subsidiaries expanded activities.

Other income decreased by SAR 1.5 million YoY on a reversal of the ECL provision.

Sequentially, the Q3 losses shrank from SAR 82.5 million in the previous quarter, as revenues grew by 9% quarter-on-quarter (QoQ) driven by better leasing revenues and expansions in subsidiaries’ activities.

Shareholders’ equity, after minority interest, stood at SAR 4.56 billion by the end of the nine-month period, up from SAR 4.51 billion a year earlier.

Accumulated losses came in at SAR 224 million as of Sept. 30, 2023, accounting for 6% of the company’s capital.

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