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UPDATE 1-Losses deepen in Q3 for Saudi pilgrimage sites developer

UPDATE 1-Losses deepen in Q3 for Saudi pilgrimage sites developer

reuters.com · 11/11/2021 06:07
UPDATE 1-Losses deepen in Q3 for Saudi pilgrimage sites developer

Adds comments to Reuters from CFO

- Third-quarter losses widened on the year for Jabal Omar Development Company 4250.SE, one of Saudi Arabia's largest listed property developers, as the pandemic impact lingered while it looks to restructure over $4 billion in liabilities.

The firm, which runs the Jabal Omar complex of hotels and property within walking distance of the Grand Mosque in the Muslim holy city of Mecca, was hit hard when the coronavirus outbreak reduced pilgrimages.

It reported a third-quarter net loss of 270 million riyals ($71.99 million), versus a loss of a 237 million a year earlier, it said in a statement on Thursday.

It attributed the result to tax provisions and an increase in expenses after the expiry of pandemic-related waivers on some financial charges.

Revenue for the first nine months of this year was also slightly lower on the year.

"The stringent COVID-19 related restrictions on travel and tourism in the kingdom have had a severe impact on Makkah’s real estate, retail and hospitality sectors," said Chief Executive Khalid Al Amoudi.

"As such, our core operating assets continue to be severely impacted by low occupancy and footfall levels."

The company embarked on a plan this year to fix its heavily indebted balance sheet.

"We are currently in the middle of restructuring more than 15 billion riyals in liabilities, with the aim of decreasing our total liabilities and improving our liquidity by reducing our debt servicing levels by over 50%," said Chief Financial Officer Wael El Turk.

Jabal Omar is looking at an aggregate de-leveraging of 3 billion riyals by mid-2022.

"What we’re doing is seeking debt restructuring or some upsizing in some places and de-leveraging mainly in others in order to reach a better financial situation, but seeking new, fresh money is not in the plans now," El Turk told Reuters.

As part of its plan, Jabal Omar restructured a 4.7-billion-riyal loan last month, secured another of 1.6 billion riyals, guaranteed by the Saudi finance ministry, sold land, and delayed some debt repayments. nL4N2R11HR

"We expect the majority of the programme to be completed by the first half of 2022, after which we will begin to see its positive impact reflected on our financial performance," Amoudi said.

($1=3.7505 riyals)

(Reporting by Davide Barbuscia; Editing by Clarence Fernandez, Kirsten Donovan)

((Davide.Barbuscia@thomsonreuters.com; +971522604297; Reuters Messaging: davide.barbuscia.reuters.com@reuters.net))