Cenomi Centers CEO says lower Q3 revenue offset by net profit rise on better pricing

Alison Rehill Erguven, CEO of Arabian Centres Co. (Cenomi Centers)

Alison Rehill Erguven, CEO of Arabian Centres Co. (Cenomi Centers), said that the marginal decline in Q3 2023 revenue was offset by a robust positive move in net profit gains on a year-on-year (YoY) basis. This performance was driven by improved pricing environment, healthy gains from ancillary work streams and fair value gains on investment properties.

In a phone call with Argaam, Erguven added this was accompanied by tenancy contracts that typically run on three-year cycles. The company fulfilled COVID-era pricing and is now renewing contracts under favorable normalized post-COVID terms. This has enabled the company to close the nine-month period of the year in a very strong position.

Further, visitor footfall surged 23.5% YoY driven by Cenomi Center’s effective tenant rotation program.

“Through the regular review of our assets, we have been able to optimize our portfolio, and in turn GLA mix, to curate the right brands and experiences to discerning Saudi consumers and ensure Cenomi Centers is in tune with trends and evolving consumer preferences,” Erguven added.

Cenomi Centers is expected to see a record footfall for 2023, given the positive movement in footfall year to date.

The occupancy rate reached 90.3% in Q3 2023, which is very strong as per industry standards. A marginal dip in occupancy is largely a result of the premeditated tenant rotation programs launched to allow us to evolve the company’s category mix and curate the right brands and experiences for consumers.

Going forward, Cenomi Centers targets higher occupancy levels of 95% in the medium term, given the strong fundamentals of the Saudi market, demographic profile, growth in non-oil GDP and increase in tourists and population.

The CEO unveiled a development pipeline including three flagship and four lifestyle destinations that will go live between December 2023 and H2 2026. The new launches are due to launch in Jeddah, Riyadh and Al-Khobar, which will contribute positively to footfall.

The company currently has seven developments in the pipeline between flagships and lifestyle destinations, including U Walk Jeddah that is slated to welcome visitors on Dec. 15. The project is already 80% pre-let.

As for future projects, the company said Jawharat Jeddah is 26% complete, and would be launched in Q1 2025. Meanwhile, Jawharat Riyadh is 35% complete, and is expected to be ready in Q2 2025. Jawharat Khobar is also predicted to open in H2 2026.

Jubail Marina Mall will also open in H1 2024 and Murcia Mall will be open to receive visitors in 2025.

Commenting on the non-core asset sale program, Cenomi Centers said it has raised SAR 937.5 million to date and expects to raise SAR 2 billion in aggregate as part of the program that is set to run for a period between 12-18 months.

The company launched its five-pillar strategy towards the end of 2022 and since then has made substantial progress across all fronts. Looking ahead, the company’s objective remains aligned with its strategic priorities of boosting its portfolio, driving product and operational excellence, enhancing organizational set-up and assuming an active role in sustainability leadership.

Cenomi Centers net profit rose to SAR 1.018 billion in 9M 2023, up 64%, compared to SAR 621 million in 9M 2022. The third-quarter profits amounted to SAR 293.6 million in 2023.