"Doha – Qatar, Tuesday 2nd April 2013: Barwa Real Estate Co. (Q.S.C) held yesterday its Ordinary Annual General Meeting, with a complete quorum of 62.81%, at 04:00pm in Al Sonbok Hall, Sharq Hotel - Doha. Barwa Real Estate Board of Directors discussed with shareholders all points listed on the meeting agenda, in addition to discussing and approving Auditors’ report and Sharia Supervisory Board report. The Ordinary Annual General Meeting mainly covered the following topics:
H.E. Mr. Hitmi Bin Ali Al-Hitmi, Chairman of Barwa Real Estate Group, presented the Board of Directors report on the company’s activities and its financial position for the year ended 31/12/2012, which included a full review of the company’s achievements, its financial results in 2012 and its future plans.
Driven by Qatar’s strong economic performance and the large scale economic diversification program as part of Qatar National Vision 2030 and National Development Strategy, the real estate sector continues its growth momentum delivering quality projects supporting the infrastructure development. Barwa, being a leading player with competency across the complete value chain of real estate development, investment, operational management and financial services continued its history of strong growth and achieved best performance in its local and international investment portfolio.
We have achieved a net profit of QR. 1,171 Million with QR 3.01 per share compared to net profit of QR. 1,416 Million with QR 3.64 per share in 2011. As a result of implementing disciplined investment approach and successful capital recycling, we have achieved a sound financial position last year. We have accomplished sustainable cost savings as reflected in decrease of QAR. 489 Million in general and administrative expenditure (decrease of 51% compared to 2011) and decrease of QAR 586 million in finance costs (decrease of 74% compared to 2011) due to restructuring the financial obligations.
2012 was a year of significant progress in delivering on the corporate strategy focusing on disciplined and sustainable growth. Our decision to focus on reshaping the Group through divestment of Non-Strategic investments, turning around of strategically fit Businesses, implementing a simplified operating model, effective governance and risk management has started delivering good results and we can look to the future with great confidence.
Development of nationals and ensuring participation of national talents in every area of our business operations is of highest priority to Barwa. We are strongly committed to Qatar National vision 2030 and its human development pillar through education, training, learning and continuous development programs for national talents and establishment of internationally recognized standards. Qatarization has reached more than 50% of the total headcount. Most of the Senior Management positions are occupied by Qatari nationals.
Barwa is continuing its strategic analysis of potential investment opportunities to ensure a strong pipeline of quality investment prospects that can deliver superior returns for our shareholders and ensure sustainable growth. There are many projects and opportunities, which are at different stages of planning and analysis. The Group Chief Executive’s report will cover more details on the financial and operational performance and future plans.
H.E. Mr. Al Hitmi expressed his sincere thanks and appreciation for the support and guidance of His Highness Sheikh Hamad Bin Khalifa Al Thani, the Emir of the State of Qatar, His Highness Sheikh Tamim Bin Hamad Al Thani, the Heir Apparent and His Excellency Sheikh Hamad Bin Jassim Bin Jabor Al-Thani, Prime Minister and Minister of Foreign Affairs. He added: “The growth and achievements of Barwa is founded upon the growth and development of our nation, made possible through our visionary leadership. We are grateful for the support of our employees, customers, partners, and shareholders. They are BARWA’s pillars and foundation through which we can continue our pursuit to achieve our aspiration to be “one of the most successful real estate development and investment companies in the world, with a home in Qatar but a business operating around the globe”.
COMPANY’S PERFORMANCE AND ACHIEVEMENTS
Eng. Abdulla bin Abdulaziz Al Subaie, Board Member & Group CEO of Barwa Real Estate Group, shared some of Barwa’s key accomplishments during the last year, saying:
We have accomplished total expenditures savings by QR. 1669 Million (reduction of 56% from last year) that has helped us to improve the profitability margin (Net Profit as a % of total revenue) to 47% in 2012 from 30% last year. We have managed to reduce total liabilities from QR. 53 billion in 2011 to QR. 37 billion end of 2012 and this resulted in reducing the total leverage ratio from 4.3 in 2011 to 2.8 in 2012. The finance cost coverage ratio, which is one of the important indicators of financial position has improved from 3.27 in 2011 to 7.26 in 2012.
Barwa Commercial Avenue is in its final stages of completion and in high demand from retailers. The project has leased almost 60% of its retail and office space with tenants having started fit out works. Barwa Commercial Avenue will commence trading soon.
Barwa City, a large scale master planned residential community was completed and handed over to tenants. The residential units are 50% occupied and we anticipate occupancy to reach 75% before the end of this year. The retail and amenities are 100% leased with fit out works due to commence shortly.
Qatar Petroleum District, one of Barwa's flagship projects occupying a strategic position in West Bays Central Business District is progressing as per schedule. The project, which was sold to QP, is expected to be completed and handed over by the end of 2015.
We have secured Sale of the properties Barwa Al Sadd Hotel tower and the Recreational Center and Somerset West Bay Serviced residencies with Katara Hospitality.
All our operating real estate assets including Barwa Al Sadd, Barwa Village and Masaken maintains more than 95% occupancy.
Al Aqaria continues to focus on providing housing and amenities in Industrial Area and has approximately QR. 980 Million worth of projects under construction and around QR. 1.67 Billion projects in the pipeline. During 2012, Alaqaria acquired the 50% shares of ASAS Real Estate Company held by another group to make it a 100% subsidiary of Alaqaria
The Turkey-based Ottomare project, a luxury 381-unit residential project has achieved a pre-sales of almost 90% and is expected to sell out soon. The project is planned to be completed by the 3rd quarter of 2013.
Refurbishment works are in progress on the London based North Row development offering office spaces in the prime West End area of London. Works are expected to be completed by 3rd quarter of this year and occupancy of more than 90% is expected by 2014.
QPM has secured new businesses in Qatar including contracts for the Metro project. The revenue from Non Shareholder businesses has reached 36% of the total revenue in 2012. The company is also expanding its operations to Saudi Arabia targeting a good share of the market considering the promising opportunities in the infrastructure sector, in particular, roads, power, rail and water, health and housing.
We have moved our headquarters to Barwa Al Sadd Towers, which marked an important milestone of last year.
GOVERNANCE, SYSTEMS AND RISK MANAGEMENT
During last year, we have undertaken a comprehensive review and update of our corporate governance policy that covers the governance principles, board of directors, its composition, duties and responsibilities, board and management committees' terms, internal control measures and risk management. We have also launched the Enterprise Risk Management project in order to continuously enhance the risk culture and adopt the best practices in line with Barwa’s aspirations, strategic objectives, and business plans. To enhance the efficiency of our key business processes and improve the technological capabilities to support execution of our corporate strategy, we have established an IT strategy that includes major enhancements to the existing ERP system.
CORPORATE SOCIAL RESPONSIBILITY
We are proud of our contribution to Qatar’s society, and we will continue to find ways of supporting the community through a range of activities, support and contributions. Believing in its role towards the community, Barwa has offered a number of units in its Real Estate projects for the social associations & corporations in Qatar.
BUSINESS STRATEGY AND OUR FUTURE PLAN 2013
Barwa has an exciting land bank of opportunities which are being assessed to identify the best use of the company’s assets with the aim of maximizing shareholder value. Work has commenced on the master planning and feasibility analysis of Fox Hills (Lusail) which is due to become an exciting new growth centre of Doha. Barwa City 2 is planned to be an attractive midmarket community and is looking to build on the success achieved at Barwa City. Barwa City 2 is in the early stages of feasibility analysis and concept design. Lusail Golf District is in the master planning and feasibility analysis stage. It is planned that Lusail Golf District will become a premium residential community built around golf course with world class facilities including a luxury hotel and retail. A construction contract was awarded for “Barwa Al Baraha” Phase 2, late in 2012. Located in the industrial area, the project is expected to develop into a city that will accommodate 53,000 residents and is considered the largest workers accommodation in Qatar and the GCC. Construction works also started for 50 Villas and 300 Apartments with modern facilities for Qatar Shell in Al Khor. We are also progressing Baraya, which is a mixed-use retail and serviced apartment development that will attract popular retail brands as well as offer serviced apartments targeting middle income families. We have also announced an experiment that will revolutionize the sustainable building Industry, by launching a green project called “BAYTNA” that will measure energy consumption and the cost of living.
Our corporate strategy is to focus on maintaining a balance between development activities and steady income yielding assets. Although the near term focus will be to capitalize on the local market opportunities, the Investment strategy considers selective and opportunistic diversification targeting UK/London, Turkey, Germany, GCC, USA and South East Asia markets.
Finally, Eng. Abdulla Abdulaziz Al Subaie expressed his thanks and appreciation to the Board of Directors, management team, employees and all partners for their continued support and contributions.
Discussing and approving the Auditors’ report on the financial statements of the company
A representative of Ernst & Young, Barwa’s Auditors for the year ended 31/12/2012 read the consolidated financial statement of the company and ensured that the consolidated financial statement presents fairly, in all material respects, the consolidated financial position of the company as at 31/12/2012, and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards.
Presenting Sharia Supervisory Board report for the legitimate activities of the company
A representative of Bait Al – Mashura Finance Consultation, read the report on the legitimate activities of the company for the financial year ended at 31/12/2012. He talked about the significant role of the Shari’a Supervisory Board in the company, as it reviewed all activities commenced over the past year and ensured that all contracts, operations and transactions including Distribution of profits and losses on investment accounts were compliant to Islamic Sharia’s regulations.
The Sharia Board has also decided the amount of Zakat on the company shares for the year ended 2012 which is 0.17 Dirhams for each share, calculated as follows: number of shares x percentage of Zakat = the Zakat of 2012 shares
Discussing and approving the company’s Corporate Governance report for the year ended 31/12/2012
Chairman of the Board of Directors discussed during the meeting Barwa’s corporate governance report which states the main principals that governs the relation between the company with its stakeholders, Management, employees, legal authorities, suppliers and all individual and corporate clients. The report was approved by all shareholders during the meeting.
Discussing and approving the company’s balance sheet and profit/loss statement for the year ended 31/12/2012
Eng. Abdullah Bin Abdulaziz Al Subaie - Chief Executive Officer of Barwa Real Estate Group presented to shareholders the balance sheet and profit & loss account for the financial year ended 31/12/2012 which was later approved by all shareholders during the meeting.
Approving the Board of Directors’ proposal for profit distribution for the year ended 31/12/2012
The Board of Directors proposed a cash dividend of 15% from the outstanding share capital amounting to QR 1.5 per share, for profit distribution of the year ended 2012, which was approved by all shareholders.
Absolving the Directors of any liability and approved their remuneration
The Chairman of the Board requested during the meeting absolved the Board of Directors of any liability for the financial year ended 31/12/2012 and determined their remuneration. This recommendation was discussed and approved by all shareholders.
Appointing Auditors for the 2013 financial year, and agreeing on their fees
The Annual General Assembly Meeting of Barwa has approved the recommendation of appointing Ernst & Young as external auditors for the company for the financial year 2013 and agreed on their fees which were approved by all shareholders during the meeting."
