Al Mazaya Holding Company is the result of an idea for investment taken to its logical conclusion. Thinking big, creating high value and earning, as well as growing and maintaining the trust of big-time investors in the Kuwaiti market and abroad, have been the hallmark of Al Mazaya. We provide a wide range of real estate products and services across the spectrum, from purchasing, apportionment and developing of large areas in select zones to offering ready-to-use residential and commercial spaces.
Al Mazaya Holding Co (K.S.C) a leading property firm in the region.
Rashid Yaqoub Al Nafisi
Dear Brothers and Sisters,
Peace, Mercy and Blessings of God upon You:
We are pleased to welcome you again with our first meetings in the new year, after a year full of challenges on all local, regional and international scales, and appeal to the Almighty God to bless us and you with all goodness, success and prosperity, and for the present year 2021 to be a year of transformation in the journey of Mazaya Company towards new prospects. During this year, we look forward to upgrading the Company's Working System on all the administrative, operational and financial scales, and in line with the changes of the stage and rapid developments witnessed by the entire world.
The entire world, of all sects and institutions, witnessed in 2020 the outspread of the novel corona epidemic, which had a significant negative effect on all the economies and world markets, particularly the services, tourism and aviation sectors and their support sectors, which cast its shadows on the markets and economic activities in our Arab region and the Arabian Gulf. This has started with the effects of the precautionary measures adopted by all the world countries to control the spread of the epidemic and protection of their citizens, to the significant shrinking resulting from the slowdown in the markets and economies as a result of the spread of this epidemic. This has negatively reflected on the real estate markets with all their products, whether real estate development processes, sales, leasing or property management.
However, with the blessing of God, we have touched upon these changes since their beginnings and initiated controlling the negative effects on the Company's operations as much as possible. With the efforts of the Board of Directors members and the Company's administrative and executive team, the Company was able to lay down and implement a realistic action plan based on a number of strategic solutions in line with the circumstances to address such challenges and their negative effects, starting with the support and preservation of the Company real estate property tenants base, as well as endeavor to implement the sales operations targeted at managing the Company's cash flows and reducing its expenditures in order ot control such negative effects on the Company's financial position.
In 2020, the Company's action plan relies mainly on the management of the crises, making it an exceptional year by all standards, as a result of the outspread of the novel corona virus epidemic. The plan was based on three main foundations, through which the Company aimed at reducing the negative effect on the Company's operations as a result of the pandemic. The first foundation of the action plan aimed at preserving the sustainable liquidity stability resulting from the leasing operations. The second foundation comprised the reduction of the Company's expenditures and costs to reduce its operational and administrative costs. The third foundation is reflected in the management of the Company's substantial liabilities towards the Company third party creditors, such as the banks, key suppliers and others, in order to establish the required balance between such matters in the form which supports the durability of the Company's financial position and its cash flows.
Furthermore, Mazaya Company was able to foster its status in the medical real estate sector in the State of Kuwait through its new real estate projects in the medical sector, which it started in 2020. The Company has also succeeded, despite this crisis, to realize real estate sales during the year.
Ladies and Gentlemen,,,
I would like to take this opportunity to present to you the annual report of your Company for the fiscal year ended on 31 December 2020, in which, as we have always done, reviewed a quick summary of the most significant achievements realized by the Company on the operation and financial scales, despite the significant challenges and difficulties confronting the Company during this difficult year.
Thanks to God Almighty, Mazaya achieved during the year 2020 operating profits of 7.6 Million Kuwaiti Dinars at the end of 2020 compared to 5.2 Million Kuwaiti Dinars at the end of 2019, as a result of the sales and leasing operations achieved by the Company, which resulted in revenues from leasing operations of 9.4 Million Kuwaiti Dinars by the end of the year 2020 compared to 8.7 Million Kuwaiti Dinars in the year 2019, despite the slowdown in the growth of leasing operations, discounts and exemptions granted by the Company to its tenants to support their activities from the repercussions of the outbreak of the novel corona epidemic. The Company also succeeded in reducing its general, administrative, sales and marketing expenses during the year 2020 by a rate of 20% compared to the year 2019, which reflects the success of the Company's plan to reduce its operating expenses and the continuation of its approach in this regard during the past three years. Furthermore, Mazaya Group succeeded during the year in reducing its debts to the banks from 104 Million Kuwaiti Dinars by the end of 2019 to 98 Million Kuwaiti Dinars by the end of 2020, which included the payment of the entire debt to a traditional foreign bank. This resulted in a reduction in the financing costs of this loan and a reduction of the average cost of the Group's credit facilities and converting all its credit facilities into fully Islamic facilities. However, on the other hand, severe negative effects were caused by the outbreak of the novel corona epidemic, which resulted in large losses resulting from the decrease and change in the value of real estate, investments, provisions, discounts and rental exemptions, which resulted in total losses of 8.48 Million Kuwaiti Dinars by the end of 2020.
Mazaya Company enjoys strong assets which amounted to the value of 208 Million Kuwaiti Dinars by the end of 2020, while the total equities amounted to 80 million dinar by the end of 2020.
In this respect, and according to the corporate governance rules, the Board of Directors of Mazaya Holding Company declares and undertakes the soundness, integrity and credibility of the financial statements and all the reports presented to the Shareholders, and that they include all the Company's financial aspects, such as the operational details and results.
Dear Brothers and Sisters,,,
Allow me to present to you the Company's achievements on the ground during the past year, which represent the fruit of the action plan laid down to manage the crisis through the aforesaid three foundations. This enabled the Company to confront and reduce the negative effects resulting from the novel corona epidemic.
First Foundation: Preserving the Sustainable Liquidity Stability Resulting From the Leasing Operations
With the grace of God, Mazaya Group was able to reduce the negative effect resulting from the reluctance of the tenants to pay their rental liabilities towards the Company, after the shrinkage of all markets and activities during the year, by granting meaningful discounts and rental exemptions to support the continuity of their activities and their business. Despite the negative impact resulting from this matter, nevertheless it also helped to increase the collection of old balances due by them, as it was stipulated that in order to give this discount that all the outstanding amounts should be paid, which contributed in the Company's success to foster its cash liquidity during the crisis despite the discounts granted to its clients. This has in turn led to the Company's ability to retain the majority of its tenants and support tier continuation in the Company's properties. In addition, the Company's entry in new projects during the year 2020 led to promoting and increasing its rents compared with 2019.
Second Foundation: Reduction of the Company's Expenditures and Costs to reduce its Operational and Administrative Costs:
During the year 2020, Mazaya was able to realize a significant saving in its administrative operational expenses by 20% compared with the year 2019, as a result of the policy adopted by the Company to reach a balanced and sustainable average of the Company's operational costs in order to promote the Company's profitability and raise its return rates. This has significantly contributed in reducing the negative effects resulting from the novel corona epidemic in 2020.
Third foundation: Management of the Company's Substantial Liabilities towards the Company's Third Party Creditors:
During the year 2020, the Company succeeded to reduce its debts to the banks, as well as reduce financing charges during the year, which was not realized only as a result of reducing the interest rates by the Central Bank of Kuwait, but also as a result of the Company's success to pay a significant part of its loans during the year, particularly those bearing high financing burdens rates. This resulted in reducing the average cost of the credit facilities to suitable levels. Further, the Company is currently about finalizing the conversion of the majority of its short term liabilities to the banks into medium and long term liabilities. This is in addition to its success during the year in restructuring its liabilities to the banks to avoid the effects resulting from the novel corona epidemic and its impact on the Company's cash flows, which did not prevent the Company from fulfilling all its liabilities towards the contractors and key suppliers, despite the resulting effects of the outspread of the novel corona epidemic.
Furthermore, Mazaya Group has succeeded during the year 2020 to sell its owned property "MU007" in Dubai, in addition to selling other residential units in the Liwan Project in Dubai, United Arab Emirates. It has also succeeded to sell the entire residential units of its project "Ritim Istanbul" in Turkey, despite the recession prevailing in the whole world during the height of the epidemic. On the level of the medical real estate sector, the Company was able to maximize the benefit from its expertise in the health care sector in a way that promotes the optimal use of available and income-generating opportunities, as it started since the beginning of 2020 to lease its new medical projects, "Mazaya Clinic 4" and "Mazaya Clinic 5" which are considered complementary to the series of Al Mazaya projects specialized in this vital sector, bringing their average occupancy during the year to 60%, in addition to maintaining occupancy rates in its other existing medical real estate projects during the year at a rate of 100%.
These foundations and considered steps adopted by Mazaya Group succeeded to stabilize the Company's financial position and promote the balance of the cash flow during the year, as a precautionary measure to resist the significant changes which the world is living as a result of the effects of this epidemic affected all aspects of life during the year 2020, in addition to working to establish a new stage in line with the inputs of the next years, according to considered and sound scientific and practical principles.
Finally, I would like to extend my warm gratitude and appreciation to you, our valuable Shareholders, for your confidence bestowed on us, as well as extend our gratitude to every member of Mazaya’s team for their constant efforts exerted to raise the standard of the Company and its brand, to reach the highest levels and fulfill all the targets laid down, God willing.
I wish you and Mazaya Company continuous prosperity and success. Peace and blessings of God upon you.
Rashid Yaqoub Al-Nafisi