First Bahrain Real Estate Development has posted a net profit of $2.7 million during 2016, representing annual growth of 148 per cent over the $1.1 million reported in the year prior, the company said at its Annual General Meeting (AGM).

“On the strength of this performance, I am pleased to confirm that the board is recommending a dividend of 5 fils per share this year,” said Waleed Alkhaja, chairman of First Bahrain.

“First Bahrain is building momentum as it implements its plans, activating dormant land holdings and diversifying its sectoral holdings. The commercial success of the El Mercado Janabiya retail centre, completed and fully leased during the year, led directly to a growth in total income of 60 per cent. Construction has also begun on El Mercado Village, our first residential development, a complementary project of villas for sale on land adjacent to the mall,” Alkhaja explained.

“On assuming our duties in 2014, First Bahrain had operating income from just 28 per cent of its holdings, being the Majaal industrial facilities. Under our mandate and approval, we grew and diversified our revenue such that 49 per cent of the investment property is now generating rental income and a further nine per cent is under construction .Across the whole of our term, rental income has grown a combined total of 353 per cent from KD279,851 to KD1.26 million, while the value of the assets has grown a combined total of 22 per cent from KD29.35 million to KD35.93 million.”

Alkhaja advised that First Bahrain had successfully managed its banking relationships to fund the construction of new projects and the creation of new streams of revenue with the debt to equity ratio increasing in measured fashion from 12 per cent in2013 to 20 per cent in 2016, leaving, as he stated, “ample room for further increases in leverage”. He also affirmed that First Bahrain had sufficient liquidity to meet all expected obligations.

Alkhaja stated that First Bahrain will look to extend its success in the retail sector to a new development in Seef, commencing the first phase of a mixed-use project which will realise the founding vision of the company. He added that First Bahrain would continue to explore ways to realise cash exits from existing income generating properties to create liquidity for further expansion and dividends.

Noting that the first successful listing of a Real Estate Industrial Trust (REIT) on the Bahrain Bourse occurred at the end of the year, he suggested that this structure could offer a means of generating exits while maintaining a stake in its existing brands.

During the meeting, the shareholders held elections, selecting new directors to join the board for the coming three-year term.

Operating out of Bahrain and Kuwait, First Bahrain is strategically positioned to execute projects across the GCC, in accordance with the principles of Sharia. – TradeArabia News Service