H: $42
L: $33
H: $41
L: $34
H: $41
L: $33
H: $41
L: $32
H: $40
L: $32
H: $39
L: $31
Jabal Omar Development, the real estate corporation that owns a number of mixed-use towers near the Grand Mosque in Mecca, suffered a loss in this quarter due to declining revenues and increased provisions for expected credit losses.
The developer reported a net loss of 465.2 million Saudi riyals (455.5 million dirhams) during the 3 months ending June 30, compared to a profit of 29.75 million riyals a year ago, he said in a statement to the Tadawul Stock Exchange, where his shares trade. He didn’t come with a loss of credit.
Revenues fell 99.5% to 1.39 million riyals at the time “because hotel and shopping center operations were shut down (March to June 2020) due to precautionary measures taken to restrict the spread of the coronavirus pandemic,” he said.
Other revenues also declined due to a drop in the investment fair, while financing prices rose during the period, according to the statement.
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Jabal Omar, one of Saudi Arabia’s largest publicly traded real estate companies, owns six hotels and a tower shopping mall overlooking the Great Mosque of Mecca. It continues its progression in the – a megaproject of more than 2 million square meters.
In the first part of 2020, the corporate recorded a loss of 682.43 million riyals compared to a profit of 31.37 million riyals at the same time last year.
The group’s existing liabilities exceeded their existing assets by 2.170 million riyals as of June 30, according to the file. The losses accumulated at the end of June amounted to 864 million riyals, or 9.3% of the company’s capital of approximately 9.3 billion riyals.
In May, Saudi Arabia tripled VAT from 5% to 15% to shore up the country’s finances, which have been affected by low oil costs and the coronavirus pandemic. This resolution affected sectors of the kingdom, adding real estate. To mitigate the impact, the country’s Housing Minister agreed to absorb tax accumulation for first-time home buyers worth 850,000 riyals or less, in order to stimulate demand for affordable housing.