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Emaar The Economic City (Emaar EC) said its accumulated losses reached SAR 2.668 billion as of Dec. 31, 2020, representing 31.3% of capital.
The losses were attributed to a decline in revenue and gross profit during 2020, compared to 2019 amid a general slowdown of economic activities in the real estate sector, in addition to the unprecedented COVID-19 outbreak, the company added in a statement to Tadawul today, March 31, 2021.
Moreover, the company’s financial results were hit by recording an impairment of SAR 316 million on properties available for sales, leases and certain operating assets, during the current year.
Due to prevailing economic environment and delays in completing projects, the management reassessed the life cycle cost estimates of residential and industrial projects. The cost estimates were revised, leading to an increase in gross losses by SAR 307 million, compared to the year earlier.
The slowdown in development activity in line with the prevailing macro-economic and COVID-19 conditions resulted in recognizing the financial charges in the current period income statement instead of capitalizing it, which increased the full-year net loss.
Moreover, impairment losses increased on outstanding trade receivables due to prevailing macro-economic and COVID-19 conditions.
The increased losses were partially offset by the improved figures of hospitality sector and Port Development Co., as well as lower general and administrative expenses during the current year, the statement concluded.
Emaar EC deepened net loss after Zakat and tax to SAR 1.248 billion in 2020, from SAR 533 million a year earlier, Argaam reported.
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