Arabian Centres board recommends 5% dividend for H2 2020

Arabian Centres Co.’s board of directors recommended a 5% cash dividend, or SAR 0.50 per share, for the second half of FY2020 ended on March 31, 2020, totaling SAR 237.5 million.

The company said in a bourse statement that the board of directors’ decision to distribute dividend for the second half of FY2020 reflects the company’s commitment to generate decent returns to its shareholders.

This decision is mainly supported by the company’s sound financial position with around SAR 1.0 billion in cash at the close of the fiscal year ended on March 31, 2020.

Additionally, some recent positive developments have further improved the company’s financial position, including:

1) The successful IPO of Amlak International for Real Estate Finance Company, wherein Arabian Centres Co. owns indirectly a total of 8.44% of its capital prior to its IPO, and the expected cash proceeds of the IPO is SAR 36.7 million (Before deducting the IPO expenses).

The total investment value of Arabian Centres Co. in Amlak International is around SAR 122.4 million before the IPO (around SAR 85.7 million post IPO), which is classified as “Other investments – Fair Value through other comprehensive Income (FVOCI)” item in Arabian Centres Co.’s balance sheet due to the non-core nature of this investment.

2) The substantial improvement in receivables collection in the recent past, with the increasing confidence in Arabian Centres Co.’s post Covid-19 recovery trajectory.

3) Positive negotiations with Arabian Centres Co.’s landlords which will bring in good savings that will minimize the negative impact of Covid-19 pandemic.