Al Mazaya Holding is continuing to make strides in its plan to complete and deliver all its current real estate projects despite challenges related to both the real estate markets and investors.

It has now commenced operating its income generating projects, Al Mazaya Holding chairman Rashid Al Nafisi said at the company's general assembly meeting after seeing the balance sheet and final accounts for the last fiscal year.

Al Mazaya, he said, was able to redirect its assets and achieve liquidity of more than KD11 million ($40 million) through its exit from Seven Zone commercial project, a JV between an individual investor and Al Mazaya, which designed, developed and carried out the entire project.

According to Al Nafisi, the company helped fill the gap in Kuwait's building materials sector through this project by providing integrated services ranging from parking spaces to the region's largest facility for building and construction materials, offices, showrooms and storehouses under one roof.

Al Mazaya has trademarked the project, which it aims to launch in other countries in the region.

"The revenues generated by this sale will be used to fund the company's expansion plans over the next few years," he said.

Al Nafisi said the company achieved operating revenues of KD18 million, including operating profits of KD4.5 million and other revenues of KD6 million.

The company had to take provisions totalling KD15 million, which resulted in a total loss of KD8 million after deducting other expenses.

"Due to the ongoing difficulties in most of the regional markets, including Dubai, where a large part of our real estate projects are based, Al Mazaya had to carry over provisions," he added.

Al Nafisi said that due to the company's 2010 operational results, as well as local and regional economic challenges, the board of directors has recommended not distributing any dividends for the year ended on December 31.

According to Al Nafisi, 2010 was a year of major market-related challenges for Al Mazaya Holding, both internal and external, and yet the company was able deliver on the promises it made in 2009.

"The company did not put any of its projects in Kuwait or Dubai on hold, rather completing most of these projects and commencing delivery, as well as managing to lease a large portion of its revenue-generating projects, despite the fact that a large number of buyers defaulted or delayed payment of their instalments, which placed an additional burden on the company.

"Al Mazaya managed to find solutions to these challenges by concluding a number of deals and restructuring certain plans in the interest of the company and its shareholders."

Al Nafisi added that 2010 witnessed Al Mazaya's successful acquisition of 93 per cent of First Dubai Real Estate Development Company, a Kuwaiti shareholding company listed on the Kuwait Stock Exchange with a paid-up capital of KD100 million, and more than KD107 million total assets, including Sky Gardens, the residential landmark located in Dubai with a stunning view of the Burj Khalifa.

He went on to explain that Al Mazaya previously sold 60 per cent of the project and invested the remaining 40pc through offering residential apartments for lease.

"The acquisition of First Dubai has helped us reduce administrative expenses through merging various departments at the two companies, and this is expected to lead to an increase in operating revenues and profits by the end of next year."

According to Al Nafisi, the company had managed to cut costs in 2010 by 35 per cent compared to 2009.

This was achieved by forming committees from the board of directors, one to follow up on the company's financial and real estate investments, one for internal auditing to ensure that cash flow was in compliance with the approved budget, and a third for personnel affairs.-TradeArabia News Service