Al Akaria Saudi Real Estate Company (Sreco), a leading real estate developer in Saudi Arabia, said it has won approval from the company's board to double its share capital from SR1.2 billion ($320 million) to SR2.4 billion ($640 million).

A Saudi joint stock company, Sreco is majority owned by Saudi Arabia’s Public Investment Fund (65 per cent) and the Public Pension Agency (5 per cent).

Sreco said the board has recommended  issuing of one bonus share for every share thus taking it to SR2.4 billion. The number of outstanding shares will rise to 240 million from 120 million, it added.

The move comes in line with the Saudi company’s desire to match its capital with current assets, as part of its strategy to become an integrated real estate development company.

Sreco had reported a net profit of SR44.6 million for the first quarter, up 11.5 per cent compared to the previous quarter, backed by higher revenue and a relative decrease in operating expenses.

In 2017, the company had announced its financial results, delivering a net profit of SR132 million, reflecting an 80 per cent growth over the previous year.

One of the kingdom’s largest publicly-listed real estate developers, Sreco said it had posted a 79.78 per cent year over year (YoY) growth in net profits last year.

This was mainly due to the 81 per cent drop in financing costs and a 20.2 per cent increase in profits from its joint ventures and subsidiaries besides a 16.7 per cent increase in short-term Murabaha income, and continuing growth in revenue by 2.2 per cent in spite of current market challenges.

The strong set of financial, operating and portfolio performance results is reported as the company prepares to launch ambitious expansion plans to deliver a new genre of large-scale, mixed-use developments in Saudi Arabia real estate market.

CEO Abdullah bin Ibrahim Saad Al Ayadhi said: "We are pleased to have delivered another strong set of results in 2017, with our proactive approach to asset management across the portfolio making a significant contribution to this success."

"Our company is underpinned by a strong leadership, clear vision and, importantly, robust financial stability, which provide necessary foundations from which to build a new era of sustainable urban communities," noted Al Ayadhi.

“We are excited to soon be embarking on a new chapter in the company’s history, which is aligned to Saudi Vision 2030, and provides an unprecedented opportunity to elevate our track record of delivering innovative community-centric real estate developments to a new level,” he added.     

Sreco is currently working on a number of strategic real estate projects including Al Dhahia, a 430,757- sq-m semi-gated residential and commercial complex, which brings a new style of integrated living to Riyadh by offering residential units, commercial space as well as retail and leisure amenities integrated into one community, Al Narjes Compound, a gated community with 162 furnished residential units; 31 Town Houses and 131 apartments occupying an area of 25,570 sq m in Riyadh; in addition to an extension to the first and second phase of the “Masaken Al Akaria” project in the Diplomatic District of Riyadh which includes 21 three-storey residential buildings, occupying a total area of 14,876 sq m.

The company has delivered over 32 projects of residential, retail and commercial projects over the last four decades, said Al Ayadhi.

In 2017, Sreco had implemented a new business framework which governed its financial and administrative processes and embarked upon a digitisation program to automate its administrative and financial business processes, he stated.

These changes will drive operational efficiencies in the years ahead and demonstrate the Company’s commitment to maximizing returns for its shareholders over the longer term, he added.-TradeArabia News Service