Chairman's Message

Chairman's Message

Dear Shareholders,

For the fiscal year 2018, IFA Hotels & Resorts recorded year end revenue of KD 57,056,511 (US$ 187,715,921), with a net loss attributable to the Owners of the parent company totaling KD 19,339,114 (US$ 63,625,685) which is 31.65 fils per share.

Shareholders’ equity decreased to KD 40,991,283 (US$ 134,861,321), while the company’s total assets increased by 20.38% to KD 344,748,577 (US$ 1,134,222,818) compared to KD 286,390,683 (US$ 944,425,323) for 2017.

The region has continued to see only sporadic and unsteady growth over the past twelve months, with sentiment towards real estate investment and overall liquidity challenged over this fiscal period. Regional political decisions have led to stability in core sectors of the hydrocarbon economy however industries such as hospitality, retail and real estate have seen fundamental shifts in supply dynamics negatively impacting both turnover and margin.

In spite of the continued soft nature of the Dubai residential real estate market, 2018 maintained the trend of seeing progress in our major projects on Palm Jumeirah. Balqis Residence began the process of handing over to residential owners in the last quarter of the year and will finalize all aspects of the residential section of the project in the coming quarter. The8 achieved material construction completion of the residential component in the last quarter also, the first quarter of 2019 will see the project begin the inspections process leading to handover.

IFA Real Estate Services continued to see growth in both the B2B segment for their facilities management services as well as the “a la carte” B2C home services division. New projects outside of the IFA Hotels & Resorts Portfolio were added such as The Jewels, Mon Reve and Saba Towers. The B2Cdivision saw greater penetration into these new projects and the rebranding of both businesses has begun to match the expansion seen in this area.

Within South Africa, bulk earthworks have commenced on Zimbali Lakes the first transfers are estimated to take place mid-2020. Sales in the 2018 financial year have been steady with greater interest in off-plan developments in the Ocean Club Zimbali and Boulevard Suites projects. The Zimbali Lakes Resort project promises to be even more ambitious than its forerunner, the hugely successful Zimbali Coastal Resort.

Overall operating revenues within the hospitality sector have been negatively impacted throughout 2018 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 achieved a healthy occupancy rate, which improved by 3 percentage points over the previous year, producing an overall improvement year-on-year in Revenue per Available Room. This plus a significant uplift in F&B revenues due to the newly opened Fairmont Conference Centre improved Gross Operating Profit and led to a higher result compared to that of 2017.

2018 sales performance of the timeshare product, Zimbali Vacation Club was exceptional with year on year increase of 17%. The refurbishment of the existing units and changes in the international exchange program has resulted in an increased interest in this timeshare product.

In conclusion 2018 has seen macro-economic pressures impact both real estate sales and hospitality revenues greatly albeit that re-structuring of the Group’s financing within some of our key development areas means we are better capable of facing these challenges in the mid-term. The completion of residential property in both Balqis and The8 in 2019 are key drivers for the near term and we look forward to the successful opening of The8’s hospitality component also.

As always I take this opportunity to restate our gratitude to our shareholders and the key members of our management and staff for their continued support and efforts towards the Group’s success.

 

Sincerely
Talal Jassim Al-Bahar
Chairman & CEO

Ibrahim Saleh Al-Therban
Vice Chairman