Alandalus net profit falls 40% to SAR 12.2 mln in Q1 2020

Alandalus Property Co. reported a net profit after Zakat and tax of SAR 12.2 million in the first quarter of 2020, a decrease of 40% year-on-year (YoY), compared to a profit of SAR 20.3 million in the same period last year.

The decline in profit is attributable to high cost of revenues due to the recognition of the operating costs of Al Marwa center and Salama tower, despite higher total revenues.

Lower profit was also driven by a decline in operating profit on the back of lower share of income of associates, higher sales and marketing costs, lower other income, high interest expenses, finance costs and higher Zakat expenses.

On a sequential basis, net profit fell by 17.4% attributable to lower gross profit as a result of decline in the revenue of retail segment.

This was due to the temporary closure of malls and commercial centers as a result of the COVID 19 precautionary measures.

The company said that total revenues rose in Q1, driven by higher revenues of the offices segment represented in Salama tower, which was acquired in August 2019.

However, revenue declined for both the retail and hospitality segments.

The retail segment revenue fell by 4% in Q1 due to the temporary closure of the malls and commercial centers from March 16 as a result of the COVID 19 precautionary measures. This was despite the recognition of the revenues of Al Marwa center.

The company said the reason for lower revenue of the hospitality segment represented by the Staybridge Hotel Al-Andalus Mall is due to the decline in the occupancy rates compared to the previous year.