Q1 Webcast Presentation - National Real Estate Company Kuwait

• Q1 2015 Earnings Webcast May 19, 2015
• Agenda 2 1 4 5 Highlights & Strategy Q1 2015 Results Q1
Financial Review 6 Business Outlook Q & A Business
Overview 3
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• NATIONAL REAL ESTATE COMPANY KPSC Established Track Record Track record of over 40
years and listed on Kuwait Stock Exchange since 1984 Global Standards Delivering global
standards in partnership with leading international architects, designers and construction
companies Robust Pipeline Pipeline with over 4 million m2 of area under development
provides visibility of future cash flows Strong Financial Performance Revenue from
Operations and Operating Profit growth of 9.9% and 15.3%, respectively in FY2014
Diversified Revenue Model Well-diversified revenue streams with contribution from both
Rental Income and Sale of Inventory Properties Strategic Investments & Alliances Strategic
investments to continue to enhance NREC’s performance
• Presence in MENA region (i.e. Kuwait, Egypt, UAE, Jordan, Lebanon, Iraq and Libya)
Reputable Board & Management Strong board and management team with in-depth
experience in related businesses. Focus on corporate governance best practices
Highlights&Strategy Established in 1973, NREC has developed a strong portfolio of retail,
commercial and residential real estate in emerging and established markets across the
Middle East and North Africa 3
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• NATIONAL REAL ESTATE COMPANY KPSC Deliver and manage a
built environment at a global standard in the MENA region creating
value for shareholders, customers and the communities where we
operate Strategic focus on the core real estate business Focus on
MENA region Investing in both sale model and recurring revenue
projects Maintain global standards customized for local needs Hire
and retain an experienced and quality management team Align the
Board of Directors and management to the
• highest corporate governance standards 4 Highlights&Strategy
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• NATIONAL REAL ESTATE COMPANY KPSC Financial Highlights
Q1 2015Results 5 Q1 Profit 2011 to 2015 GROWTH 50%
(CAGR) Continued improvement of core business performance
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Business Overview
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NATIONAL REAL ESTATE COMPANY KPSC 7 2014 Total Assets
KD 553 m 2014 Shareholder Funds
KD 200 m 2014 Net Profit
KD 11.0 million 2014 Retained Earnings
KD 74.1 m High profile developments across the MENA region include:
Souq Sharq: The first water front shopping mall in Sharq, Kuwait Grand
Heights: Residential development of 3.8 million m2 in Cairo, Egypt
ANREPCO: Warehousing, Residential & Commercial Complexes
development of 2.0 million m2 in Aqaba, Jordan. Palm City: An exclusive
residential community of 400 units in Tripoli, Libya Reem Mall: Super
regional mall under development in Abu Dhabi, UAE BusinessOverview
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• NATIONAL REAL ESTATE COMPANY KPSC 8 Revenue By
Segment FY2014 63.0% Real Estate 22.5% Investments
14.5% Other Real Estate Revenue
• By Location FY2014 51% Kuwait 6% Lebanon 38% Egypt 5%
Jordan 2013 2014 2012 56% 44% 55% 45% 28% 72%
Rental Income Sales Income Well-diversified revenue streams
BusinessOverview
8 Portfolio of assets in new and established markets across
MENA BusinessOverview Land Area:
• 202,000 m2 Area (GFA):
• 15,700 m2 Land Area: 3.8 mn m2 Land Area: 104,000 m2
Land Area: 103,624 m2 GLA: 190,000 m2 Land Area: 2 mn m2
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• A closer look at our projects in EGYPT & ABU DHABI
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NATIONAL REAL ESTATE COMPANY KPSC The $1 billion Grand Heights project is designed to provide
homes for 25,000 people when completed Company: Kuwait Wadi El Nile Urban Development Co.
Location: 6th of October City, Egypt
Project: Grand Heights Land Area : 3.8 million m2
Offerings: Residential Community
Revenue Streams: Sale of properties Located in 6th October City, just west of Cairo
Day one community – fully finished houses delivered in clusters means a better living experience
when you move in
Generated KD4.6 million in sales during the quarter, bringing total sales up to KD88 million since
2013, and the number of units sold to 712.
Phase 1 of Grand Heights is expected to complete during the second half of the year. The community
is scheduled to complete in 2021, and will comprise over 1,450 family homes. BusinessOverview
PORTFOLIO HIGHLIGHT- EGYPT: GRAND HEIGHTS
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• NATIONAL REAL ESTATE COMPANY KPSC PORTFOLIO HIGHLIGHT- ABU DHABI: REEM MALL
Reem Mall is expected to set new standards in mixed use real estate development and be a
landmark in regional growth GFA: 260,000 m2
• Offerings: Shopping Center
• Revenue Streams: Retail Rental 2 million square foot super regional shopping centre
• Currently at the authority approval stage and will break ground this year
• More than 420 stores, including 85 restaurants, and a large format hypermarket
• Unparalleled breadth of entertainment and leisure offers
• Kuwait based UPAC will be investing up to $224 million into the project
• $1 billion investment Company: Al Farwaniya Property Development Co
• Location: UAE
• Projects: Reem Mall BusinessOverview
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• NATIONAL REAL ESTATE COMPANY KPSC 13 Agility at a
Glance Operates as a provider of integrated logistics, freight
forwarding and specialty services across 100 countries
• Two main businesses: Agility Global Integrated Logistics and
Agility Infrastructure Strategic Investment BusinessOverview
• Outlook
• NATIONAL REAL ESTATE COMPANY KPSC We expect better
performance during the year from our core rental portfolio and
development business 14 1
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Financial Overview
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• NATIONAL REAL ESTATE COMPANY KPSC Q1 2015 Results 16
Q1 Profit 2011 to 2015 GROWTH 50% (CAGR) Continued
improvement of core business performance Financial
Highlights
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NATIONAL REAL ESTATE COMPANY KPSC From an operating perspective, we had another successful quarter with results in line with
our business plan.
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Our Kuwait rental portfolio continued its steady performance and grew by 3.5% year-on-year to KD2.5 million in Q1 2015 with an
occupancy of 98%. This is a strong result considering the over supply of office space in the market.
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In Egypt generated KD 4.6 million in unit sales including a significant price increase
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In Jordan, revenue increased by 83% from Q1 2014, reaching KD 386,720 in Q1 2015. Growth was driven by improved demand at the
1.5 million square-meter Aqaba Warehousing and Industrial Park property, as well as other non-recurring revenues.
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In Libya, NREC continues to monitor geopolitical developments as it relates to its investment in the Palm City residential project.
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We remain focused on developing our core regional development properties and optimizing NREC’s strong rental portfolio.
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17 Q1 2015 Results
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• NATIONAL REAL ESTATE COMPANY KPSC Total Revenue (KD
mn) EPS (Fils) Operational Revenue (KD mn) 18
FinancialOverview
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• NATIONAL REAL ESTATE COMPANY KPSC Total Assets (KD mn)
Shareholders’ Equity (KD mn) 19 FinancialOverview
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• NATIONAL REAL ESTATE COMPANY KPSC ROE (%) ROA (%) 20
FinancialOverview
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• NATIONAL REAL ESTATE COMPANY KPSC Book Value Per Share
(fils) 21 FinancialOverview
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• NATIONAL REAL ESTATE COMPANY KPSC Net Debt to Equity
(x) Current Ratio (x) 22 FinancialOverview
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Q&A
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Disclaimer:
• This presentation contains statements that contain “forward looking statements” including,
but without limitation, statements relating to the implementation of strategic initiatives,
and other statements relating to National Real Estate Company’s (‘NREC’ or the ‘Company’)
future business developments and economic performance. While these forward looking
statements indicate our assessment and future expectations concerning the development of
our business, a number of risks, uncertainties and other unknown factors could cause actual
developments and results to differ materially from our expectations. These factors include,
but are not limited to, general market, macro-economic, governmental and regulatory
trends, movements in currency exchange and interest rates, competitive pressures,
technological developments, changes in the financial conditions of third parties dealing with
us, legislative developments, and other key factors that could affect our business and
financial performance. NREC undertakes no obligation or shall not be liable for any indirect,
special, incidental or consequential damages resulted of any reason hereof on liabilities of
any nature whatsoever to publicly revise any forward looking statements Website:
http://www.nrec.com.kw/