Al Mazaya Holding Company is the result of an idea for investment taken to its logical conclusion. Thinking big, creating high value and earning, as well as growing and maintaining the trust of big-time investors in the Kuwaiti market and abroad, have been the hallmark of Al Mazaya. We provide a wide range of real estate products and services across the spectrum, from purchasing, apportionment and developing of large areas in select zones to offering ready-to-use residential and commercial spaces.
Board of Directors Report
Mazaya Holding Company KSCP (Holding) for the Fiscal Year Ended on 31/12/2022
Sisters and Brothers:
Our valuable shareholders,
May the peace, blessings, and mercy of God be upon you.
We welcome you again in our first meetings in the new year, and pray to the Almighty Allah to grant us and you all goodness, prosperity and success, and that the next phase is a transformation and elevation phase in the journey of Mazaya company towards new horizons in line with the recent changes and speedy developments witnessed by the entire world.
Ladies and gentlemen:
In 2022, Al Mazaya Holding Company witnessed significant challenges and difficulties resulting from the changes of real estate markets in which it operates, particularly the UAE and Turkish markets, which were affected extensively by numerous geopolitical and economic factors, in addition to the significant changes in the capital markets by increasing the interest rates significantly several times during the last year, in an attempt to control the markets and rapid inflation trends. This resulted in low liquidity and reduction in the mortgage rates due to their high cost. Therefore, this had negatively affected the value of real estate properties in various real estate markets. Dubai witnessed significant changes in supply and demand, represented in the increase of real estate units’ supply , the drop in their selling prices, in addition to the intensity of competition between real estate developers, which prompted them to develop marketing plans with competitive financing facilities. Meanwhile, in the Turkish market, which was classified in the beginning of 2022 as a hyperinflationary economy along with large fluctuations in the Turkish Lira exchange rates during the year 2022 especially in the first half of the year, which constituted an additional burden on the Turkish economy and, consequently, the decline in cash flows resulting from sales and leasing operations in the Company's projects there.
These factors, which were also affected by the implications of the regional and international conditions, had negatively affected the Company’s results during the year, especially with regards to the drop in some of its properties’ values, particularly in the aforementioned markets despite the increase in the Company’s operational income compared to last year. This was planned by the Company’s management before the beginning of the year through a business plan based on a number of strategic solutions that copes with the current conditions and addressing a number of them as well, which enabled us to achieve the required operational success by the end of year 2022.
In 2022, the Company’s operational plan was based on three foundations in order to have radical solutions to secure liquidity requirements as well as preserving its financial position and cash flow strength with full determination to meet its financial obligations towards all banks, contractors and vendors and to proceed with the preparation for new start of the Company in next years.
The first foundation was to reduce the Company’s presence in the real estate markets which witnessed difficulties by selling its real estate assets, reducing its operations and reducing its administrative costs in those markets. This includes selling various real estate properties in Dubai, in addition to the current approach for the Company to exit its main investment in the Republic of Turkey. The second foundation was the reduction of the Company’s bank debts during the year. The third foundation was to enhance the Company’s operations through increasing the occupancy rates in the income generating properties as well as increasing the Company’s income arising from its medical projects.
Ladies and gentlemen:
We are pleased here to present the annual report of your Company for the fiscal year ended 31 December 2022, in which, we presented a quick summary of the most important achievements of the Company on both operational and financial levels.
Thanks to Allah The Almighty, Mazaya had achieved total operating revenues during 2022 of KD 15.18 Million which resulted mainly from sales and leasing operations as compared to KD 13.24 Million in 2021, an increase of almost 15%, which includes revenues from rental operations amounting to KD 11.13 Million in 2022 as compared to KD 9.56 Million in 2021, an increase of almost 16%. which resulted in profits from rental operations of KD 9.16 Million in 2022 as compared to KD 7.39 Million in 2021, an increase of almost 24%. Meanwhile, the revenues from sales operations had increased to KD 1.80 Million in 2022 as compared to KD 0.55 Million in 2021. Despite this success and growth on the operational side of the Company, the drop in the Company’s real estate properties in those aforementioned markets resulted in total unrealized losses of almost KD12.63 Million, which represents less than 6.5% of the Company’s assets by the end of 2022 and represents almost the total net loss of the Company for the year 2022. In terms of its financial position, Al Mazaya Holding Company has solid assets value amounting to KD 203.11 Million by the end of 2022, the vast majority of which are real estate assets. This supports the Company's directives and future plans to improve and strengthen the Company's financial position in response to the challenges facing the Company in this regard.
In that respect and according to the corporate governance rules, the board of directors of Mazaya Holding Company declares and undertakes the accuracy, integrity and credibility of the financial statements and all the reports submitted to the shareholders, which include all the financial aspects of the Company, including operational details and results.
Sisters and Brothers:
Allow me to present to you the Company’s achievements during last year, which were the result of the action plan that enabled the Company to achieve the desired operational results:
First: Exchange of Land Plots in the United Arab Emirates:
Al Mazaya Group had successfully concluded an agreement with the main developer of the WaterFront project in Dubai, United Arab Emirates, to exchange the land plots owned by one of Al Mazaya Group’s subsidiaries in the United Arab Emirates with better land plots as well as a credit note for acquisition rights of additional land plots in other districts of Dubai, as those plots are more distinct in terms of their location, ease of utilization or development as deemed fit to the Company. This had availed multiple options to Al Mazaya Group to benefit from such properties in order to enhance the Company’s financial position of the Company.
Second: Enhancing the Company’s operations by increasing the occupancy rates of rental projects and completing the projects under development:
The Company succeeded to achieve an occupancy rate of 100% for its current medical projects, represented in Mazaya Clinic 5 in Jabriya and Wara Hospital in Sabah Al Salem, as well as an occupancy rate of 98% in Clover Medical Centre in Jabriya, Mazaya Clinic 3 in Benid Al Gar Mazaya Clinic 4 in Hawally, Mazaya Clinic 6 in Salmiya and Mazaya Clinic 7 in Jahra, while Mazaya Towers had achieved an occupancy rate of 93% in Kuwait City and an average occupancy rate of almost 90% for other income generating projects of the Company in the countries where they exist despite the real estate market challenges in some of those countries, as we already stated earlier. This indicates the solid base and quality of the income generating assets of the Group.
Third: Entering new projects in the medical sector:
The Company was able to maximize the benefit from its experience in the healthcare sector, in the manner that promotes the optimum utilization of the available income yielding opportunities. The Company invested in a new project “Mazaya Clinic 8” in the medical sector during 2022 in Sabah Al Salem district, which is considered an integral part of Al Mazaya Clinics specialized chain in this vital sector that yields its fruitful results on the Company’s returns.
Finally, those achievements and well-studied steps by Al Mazaya had reinforced the balance of the cash flow during the current year and increased its operational profits, in addition to proceeding for a new phase which conforms with the challenges of the next years in accordance with sound, practical and scientific foundations.
At last, I would like to extend my heartfelt gratitude and appreciation to our valuable shareholders, for their confidence in us, and would like to thank every member of Al Mazaya team for their constant efforts exerted to promote the Company and its trademark, and to reach higher levels and achieve all the target goals, with the will of Allah The Almighty.
I wish you and Al Mazaya continuous prosperity and success.
May the peace, blessings, and mercy of Allah be upon you.