Arriyadh Development Company’s (Arriyadh) net profit dropped by 8% in 2018 due to a lack of land sales, the Saudi-based company’s full-year results have revealed.
Profit after taxes and zakat fell to $54.1m (SAR203m), a single-digit decline when compared to the $62.6m (SAR235m) in net profit made during 2017.
Revenue, which the business generates from real estate sales among other avenues, fell by 9% year-on-year to $75.4m (SAR283m).
This came despite the company claiming to have witnessed a “significant” hike in rental income during the last 12 months.
Following a slowdown in profitable growth, Arriyadh said it will increase the number of publically available shares in the business by a third to strengthen its capital position.
Based on the recommendation of its board of directors, the company will increase the number of shares up for grabs from 1.3 million to 1.7 million. By issuing more shares, the company hopes to raise extra cash from the market to “strengthen” its liquidity position.
With each share valued at approximately $5.3 (SAR20.24) on Tadawul, Arriyadh could generate up to $118.4m (SAR444m) to fuel future development of Riyadh, which is undergoing a profound transformation.
This move, however, will still require a rubber-stamp by authorities before any go-ahead.