For the fiscal year 2017, IFA Hotels & Resorts recorded year end revenue of KD 63,255,493 (US$ 208,596,484), with a net loss attributable to the Owners of the parent company totaling KD 5,524,919 (US$ 18,219,424) which is 9.08 fils per share.
Shareholders’ equity decreased to KD 63,188,694 (US$ 208,376,202), while the company’s total assets reduced by 0.8% to KD 286,390,683 (US$ 944,425,323) compared to KD 288,746,239 (US$ 942,614,018) for 2016.
Regional macro-economic conditions have been exceptionally challenging throughout the course of this financial year. While economies become accustomed to reduced liquidity and greater cost burdens both in terms of taxation and administration, overall business and consumer sentiment has shown reticence to increased investment. In light of those circumstances and to ensure extraction of shareholder value, in December the group concluded the successful exit from interests with the Four Seasons Beirut.
Progress within the Dubai developments has continued throughout the course of 2017, in spite of headwinds within this market both in terms of rental and sales pricing. Innovative payment schedules and product enhancements have led to continued, steady, sales within The8 which passed several milestones along the completion schedule throughout the year.
During the last quarter, the group exited a significant portion of our interests within the Yotel management company. Our remaining interests are managed through IFA Client Advisory in what has been a marquee year for the Yotel brand with enormous changes in both the asset mix and in the investment levels to our burgeoning operating brand. Not only did 2017 witness the opening of Yotel Singapore and Yotel Boston as well as landmark operating deals in the UK, Amsterdam and elsewhere but also a significant shift in industry belief towards Yotel’s unique design and branding. In September a fund affiliated with Starwood Capital Group (“Starwood”) committed to an investment of $250 million in Yotel. This strategic partnership will help fuel a rapid international expansion plan covering a variety of regions and properties worldwide.
IFA Hotel Investments completed a restructure and rebranding of their operating companies, reforming as IFA Real Estate Services (IFA RES), more attuned to the broad range of wholesale and retail real estate services it provides. November also saw the signature of the group’s joint venture with Unified Real Estate Development in the Kingdom of Saudi Arabia. Unified Real Estate Development is one of the largest and most respected companies in Saudi Arabia, with shopping centers spread throughout the Kingdom. The joint venture, Sahalah Facilities Management, will see IFA RES’ core FM and “on demand” services expand regionally for the first time.
Within South Africa, our development portfolio expanded with the successful launch of Zimbali Lakes Resort in December. Initial sales of ZAR 650 Million were seen within the launch window which is testament to the continued desirability of the location. This year also witnessed the opening of the conference center within Fairmont Zimbali, this has quickly augmented both direct revenues from its use as well as the planned increase in business tourism to the resort. Over and above this, the launch of the Boulevard Suites project late in the year was also well received with substantial sales of these studio units.
Overall operating revenues within the hospitality sector have been negatively impacted throughout 2017 in South Africa. Economic hurdles as well as political instability have led to significant downward pressure on revenues to the industry. Notwithstanding these, Fairmont Zimbali maintained both a healthy occupancy rate, albeit reduced from 2016, more importantly ADR improved significantly leading to a higher GOP performance than expected.
Zimbali Vacation Club also performed well, with record sales in the year leading to the finalization of converting further hotel blocks from the hotel to the timeshare product.
In conclusion 2017 has seen key changes in the group’s operating asset mix as well as a significant shift in expansion goals for the Yotel brand. The developments in Dubai have progressed towards completion and our South African operation has seen successful launches as well as adept mechanisms to ensure continued profitability of the hotel assets, despite considerable obstacles.
Our continued growth and success relies heavily on the support of all our personnel, management and shareholders. As always, I would like to take this opportunity to reiterate our thanks for their ongoing assistance and hope that the coming year will prove successful to all.
Talal Jassim Al-Bahar
Chairman & CEO
Ibrahim Saleh Al-Therban