Makkah, KSA: Jabal Omar Development Company (“JODC” or the “Company”) (Tadawul: 4250), one of the largest real estate developers in Saudi Arabia and the master developer of the iconic mega mixed-used project in Makkah, Jabal Omar, today announced its financial results for the second quarter (Q2) and six month period (H1) ending 31 June 2022.

Financial Highlights

  Year on Year (YoY) Change
SAR ’000 (unless otherwise stated) H1 2022 H1 2021 % change
Revenue 391,292 98,858 295.8%
Gross profit / (loss) 71,511 (135,198) 152.9%
Operating profit / (loss) (31,113) (364,975) 91.5%
Financial costs (283,559) (373,557) (24.1%)
Net profit / (loss) (311,086) (74,883) (315.4%)
Normalized net (Loss)
(excluding SAR 662,179,000 gain from land sale booked in Q2 2021)
(311,086) (737,062) 57.8%

  

SAR ’000 (unless otherwise stated Q2 2022 Q2 2021 % change   Q1 2022 % change
Revenue 281,645 77,285 264.4% 109,647 156.9%
Gross profit / (loss) 97,249 (46,752) 308.0% (25,738) 477.8%
Operating profit / (loss) 41,112 (227,407) 118.1%   (72,225) 156.9%
Financial costs (171,529) (163,796) 4.7%   (112,030) 53.1%
Net profit (loss) / profit (128,624) 270,570 (147.4%)   (182,462) 29.5%
Normalized net loss (excluding SAR 662,179,000 gain from land sale booked in Q2 2021) (128,624) (391,609) 67.2%  

Khaled Al Amoudi, CEO of Jabal Omar Development Company, said:

“The above-expected activity level in the Hajj and Umrah sector since the start of 2022 supported our top-line solid performance. Occupancy levels at our hotels were almost back to pre-pandemic levels, and footfall at our malls also witnessed a solid recovery momentum. We are expecting these levels to be sustained for the remainder of the year, as there remains pent-up solid demand for pilgrims, both domestic and international, to visit Makkah and the holy sites.

 The ongoing implementation of our company-wide transformation plan continues to reflect positively on our financial performance. Our gross and operating profits are improving significantly, thanks to the cost containment and operational efficiency enhancement measures. Moreover, we continue to see the tangible, positive impact of our ongoing capital structure optimization plan. Our balance sheet is becoming more robust, and our financial position more sustainable compared to the past two years. 

Looking ahead, we expect to bring in new sources of revenue from our recently opened malls and soon-to-be-opened hotels. We are also focused on making substantial progress on construction work for phases 2,3, and 4. Moreover, we will continue optimizing our operating assets, further deleveraging our balance sheet and optimizing our capital structure. The impending EGM to vote on the Alinma Fund debt-to-equity transaction will be a game changer for us; if approved by our shareholders, the Company will be entirely on track to achieve its targets short-short for short to mid-term targets.”

Company Highlights

Continued execution of JODC’s transformation

The Company received Capital Market Authority (CMA) approval for a capital increase by converting all outstanding debt owed to Alinma Fund into ordinary shares. The EGM will be held on 25 August to vote on the transaction. Upon its completion, 225,134,162 new ordinary shares will be issued to the fund’s unitholders issued given, excluding the Company’s ownership of the fund and SAR 5,301,201,080 of debt will be converted into equity. The total value of the transaction will be determined based on the closing price of the Company’s shares on the last trading day before the date of the EGM. If approved, the Alinma Fund’s new shares are expected to be issued and the assets transferred to JODC in Q3 2022. 

Project construction for Phases 2, 3 & 4 set for timely delivery

JODC continues to expedite project delivery as part of the Company’s strategic priorities. Over the past two years, JODC has made numerous improvements, including greater visibility on cost and completion dates as a holistic organizational restructuring of the project management teams to enhance efficiency.

Revenue momentum to continue gathering pace as Hajj & Umrah sector recovers

The Company expects the positive revenue momentum seen over the past 6-month period to continue with the removal of pandemic restrictions, the increase in travel, and the practical efforts of the Government in the management of the pandemic.

JODC expects to benefit from strong solid, and robust recovery in the number of visitors over the year and the upcoming Hajj season in particular. The Company has already seen this recovery and bear fruit, with over 6.6 million pilgrims performing Umrah during Ramadan 2022 and nearly 1 million pilgrims between 7 and 12 July during Hajj. More than 23 million Umrah permits have been issued since the beginning of the season, according to the Ministry of Hajj and Umrah, representing a positive outlook for the remainder of the year.

A growing portfolio of operational assets

JODC has six operational hotels in its hospitality portfolio and expects two more to be operational before the end of the year, which will further add to top-line growth. In its retail portfolio, the Company is in active negotiation with several major retailers to secure quality tenants at its newly opened premium retail destination in phase 2 & 3, Souk Al Khalil (3) and Souk Makkah Gate.

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