Emaar The Economic City announces its Annual Financial results for the period ending on 2023-12-31
| Element List | Current Year | Previous Year | %Change | ||
|---|---|---|---|---|---|
| Sales/Revenue | 1,031 | 363 | 184.02 | ||
| Gross Profit (Loss) | 432 | -232 | - | ||
| Operational Profit (Loss) | 243 | -795 | - | ||
| Net profit (Loss) | -253 | -1,157 | -78.13 | ||
| Total Comprehensive Income | -249 | -1,122 | -77.81 | ||
| Total Share Holders Equity (After Deducting the Minority Equity) | 6,406 | 6,655 | -3.74 | ||
| Profit (Loss) per Share | -0.22 | -1.02 | |||
| All figures are in (Millions) Saudi Arabia, Riyals | |||||
| Element List | Amount | Percentage of the capital (%) | |
|---|---|---|---|
| Profit (Losses) Resulting From The Change In Investment Propertie’s Fair Value | - | - | |
| Accumulated Losses | -4,939 | 43.58 | |
| All figures are in (Millions) Saudi Arabia, Riyals | |||
| Element List | Explanation |
|---|---|
| The reason of the increase (decrease) in the sales/ revenues during the current year compared to the last year | Increase in revenue by 184% during the current year compared to prior year was mainly driven by new sale of industrial & commercial land as well as residential properties. Additionally, the company recognized revenues from progress on existing projects and re-assessments of project life cycle cost estimates also contributed to increase in revenue during the year. |
| The reason of the increase (decrease) in the net profit during the current year compared to the last year is | Net loss for the year ended 31 December 2023 is SAR (253M) which has significantly decreased compared to the net loss of SAR (1,157M) for the previous year. Key factors contributing to decrease in net loss during the current year are summarized below:
1.Emaar The Economic City’s group (the “Group”) reported a gross profit of SAR 432M during 2023 compared to a gross loss of SAR (232M) in the previous year which represents an increase in gross profit by SAR 664M (i.e. 286%). The variance is mainly due to the following:
•Projects’ gross profit increased by SAR 605M, from a gross loss of SAR (8M) in the prior year, to a gross profit of SAR 597M during 2023, driven mainly by new sale of industrial & commercial land as well as residential properties, which contributed SAR 302M to the gross profit. Additionally, the company recognized revenues from progress on existing project development, in addition to regular periodic reassessment of project life cycle cost estimates which combined contributed SAR 295M to the gross profit.
2.General and administrative expenses for the current year were SAR 322M as compared with the previous year SAR 464M resulting in a net decrease of SAR 142M. The decrease is mainly attributed to significantly lower legal provision and reduction in employee costs, however the impact was partially offset by increase in professional fees.
3.The decrease in loss by SAR 44M due to a lower provision required under the Expected Credit Loss (ECL) model resulting from improvement in the collection.
4.The increase in financial charges of SAR 194M was mainly due to an increase in financing costs directly attributed to an increased gross financing costs with the raise of SAIBOR, and a slight increase in term loans compared to the previous year.
5. Other operating income increased by SAR 169M compared to the previous year, mainly attributable to the gain on disposal of investment properties resulting in SAR 70M, furthermore Group received an amount of SAR 37.5 million from the endowment fund related to a subsidiary, the reversal of SAR 44M in excess provisions no longer required, and forfeited amounts of SAR 13M due to the cancellation of sales contract. |
| Statement of the type of external auditor's report | Unmodified opinion |
| Comment mentioned in the external auditor’s report, mentioned in any of the following paragraphs (other matter, conservation, notice, disclaimer of opinion, or adverse opinion) | We draw attention to Note 1 of the consolidated financial statements, which indicates that the Group incurred a net loss of SR 253 million during the year ended 31 December 2023 and, as of that date, the Group’s current liabilities exceeded its current assets by SR 6,777 million. In addition, the Group has not complied with the requirements of covenants related to long-term borrowing facilities, resulting in the borrowings with outstanding balance of SR 2,361 million as at 31 December 2023 being immediately due and payable on demand in accordance with the terms and conditions of the borrowing agreements. The Group’s ability to meet its obligations as they fall due and to continue its operations without significant curtailment is therefore highly dependent on the successful execution of management’s plans including debt restructuring, obtaining additional funding from shareholders and the sale of properties to generate sufficient cash flows. These events or conditions, along with other matters as set forth in Note 1, indicate that a material uncertainty exists that may cast significant doubt on the Group's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
The consolidated financial statements for the year ended 31 December 2022 were audited by another auditor who expressed an unmodified opinion on those financial statements on 9 April 2023 (18 Ramadan 1444H). |
| Reclassification of Comparison Items | Certain comparative figures have been reclassified, wherever necessary, to conform to the presentation adopted in the consolidated financial statements for the current year. |
| Additional Information | - |
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