Riyadh – Mubasher: Jabal Omar Development on Sunday reported turning to profitability in the full-year 2018 on the back of higher sales, lower cost of revenue ratio and operating costs.

The Saudi real estate developer achieved SAR 193.78 million ($51.66 million) in net profit after zakat and tax in 2018 against SAR 600.96 million ($160.22 million) in 2017, it said in a filing to the Saudi Stock Exchange (Tadawul).

Sales surged 245% year-on-year to SAR 1.963 billion from SAR 568.83 million, while total profits leapt by over 7,000% to SAR 797.84 million from SAR 11.11 million in 2017.

Jabal Omar Development attributed the turn to profitability to the 245% revenue growth from residential units, whereas it had seen no such sales in 2017, added to a 28% year-on-year growth in revenue from hotels and 60% rise in commercial centre revenues.

Moreover, the company’s cost of revenue ratio dropped to 59% last year from 98% in 2017, the statement showed, indicating that this was mainly due to the sale of the residential units, including off-plan sales which started in December 2018 and which carried higher margins

It is worth noting that in 2018, Jabal Omar’s financial charge rose by SAR 187 million “due to the full year recognition of the sale and lease back transaction.” This was offset by the firm’s expense management “despite the expansion in operating and investment activities,” the firm concluded.

Jabal Omar last reported turning a profit in Q3-18 of SAR 469.62 million ($125.15 million) against a net loss of SAR 593.97 million ($158.29 million) in the same period of 2017.

As for the first nine months of 2018, the Saudi property developer also turned a profit of SAR 192.3 million against losses of SAR 600.96 million in the January-to-September period of 2017.

Jabal Omar Development’s stock last closed Thursday stable at SAR 34.15.