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Saudi Jabal Omar incurs losses of SR1.3 billion due to low revenues

Saudi Jabal Omar

Saudi Jabal Omar Development Company has incurred losses by 111% during 2020, compared to 2019, due to the Coronavirus repercussions, financial results showed.

The company’s financial results, released Yesterday, showed that the net loss after zakat and tax reached SR1.34 billion, compared to SR635.1 million in 2019.

The company, in its statement to the Saudi Stock Exchange (Tadawul), also indicated a decline in its revenues by 80%, on an annual basis, to reach about SR177 million.

Saudi Jabal Omar

The company said revenues were affected by the Coronavirus and the precautionary measures to confront its spread, in addition to the increasing allocations for credit losses and zakat allocations.

One of the reasons for recording losses is the decrease in operating income, because of the loss in the fair value of the investment through the income statement compared to the profits in the previous year, the company said.

The financial results showed a decrease in the general and administrative expenses and financial burdens, as a result of the exemption from fees due to the Real Estate Development Fund for the period between March 10, 2020, and until the beginning of November.

Accumulated losses

The accumulated losses of Jabal Omar Development Company, until the end of last year, reached about SR2.13 billion, equivalent to 22.9% of the capital, due to the review of accounting treatments for previous years, in addition to 2020’s losses.

On March 9, the company announced that it had signed a guarantee agreement with the Ministry of Finance to issue a guarantee in favor of Banque Saudi Fransi to grant the company facilities of SR1.600 billion.

The company stated that the guarantee was issued after the company approved the submission of a number of declarations and pledges, in addition to its agreement to update the previously registered mortgage in favor of the Ministry of Finance to include the amount of the guarantee.

Jabal Omar Development said in its statement that the financing period will be 15 years, starting from the date of signing the facility agreement on March 8, 2021. The facilities will be used to complete the remaining works of the third phase of the Jabal Omar project.

During the first nine months of last year, the company recorded an increase in losses reaching SR917.78 million, compared to SR206 million in the same period of 2019. This is an increase of 345.54%.

Keep reading: Saudi Amiantit Co. Resorts To Statutory Reserve Remainder

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