|Other Financial Highlights: |
• The Company’s revenues increased by 1.0% in FY2020, the equivalent of SAR 20.9 million, compared to FY2019, driven primarily by key initiatives such as the implementation of an improved discount policy, delivering a weighted average discount rate across tenants of 5.6%, equivalent to SAR 119.5 million in FY2020 against 6.8%, equivalent to SAR 149.0 million in FY2019 and resulting in higher net rental revenues. The year-on-year decrease in total discounts came despite the Company’s granting of a special discount in the final two weeks of FY2020 following COVID-related closures. Revenues were further enhanced by the launch of the two new shopping centres (U Walk Riyadh and Nakheel Mall Dammam) during the current year, as well as the inauguration of cinema theatres at four of the Company’s existing portfolio.
• Gross profit increased by 3.2% in FY2020 compared to FY2019, the equivalent of SAR 44.5 million, primarily driven by the nonrecognition of rent expenses following the adoption of IFRS 16 starting from the first quarter of FY2020. Unrecognized rent expense at the gross profit level was offset by the increase in depreciation of right-of-use assets at the operating level, which amounted to SAR 159.6 million in FY2020.
• Finance cost decreased to SAR 351.3 million in FY2020, down by 20.1% or SAR 88.3 million compared to FY2019, reflecting a one-time transaction costs of SAR 125.2 million booked in FY19 following the completion of a refinancing transaction in the same year. That was then offset by a write-off of transaction costs in FY2020 amounting to SAR 59.9 million following the completion of a further refinancing transaction in the same year.
• The Company recorded an EBITDA of SAR 1,625.5 million in FY2020, up by 9.8% compared to FY2019 and with a 5.9 percentage-point expansion in the EBITDA margin reaching to 74.0%. Improved EBITDA was driven by enhanced Gross Profitability and the nonrecognition of rent expenses following the adoption of IFRS 16 during the current year (Q1-FY20). It should be noted that the annual comparison of EBITDA figures is not like-for-like, as the EBITDA figure for FY2019 is inclusive of pre-IFRS rent expense.
• EBITDAR (before rent expense to normalize for the effect of adopting IFRS 16) recorded SAR 1,625.5 million in FY2020, down by 4.9% compared to FY2019, with the EBITDAR margin declining by 4.5 percentage-points to book 74.0%.
• Funds from operations (FFO) decreased to SAR 959.8 million in FY2020. The FFO margin recorded 43.7% in FY2020, decreasing by 6.9 percentage-points compared to the 50.6% recorded in FY2019 mainly due to the write-off of a one-time transaction costs associated with the refinancing transaction completed during the current year (Q3-FY20), the reversal of a previously booked zakat provision in the previous year (Q3-FY19) and the consequent decrease in Net Profit in FY2020.
• Cash Generated from Operating Activities reached SAR 1,169.3 million in FY2020, up from the SAR 497.3 million recorded in FY2019 mainly due to the increase in collection from related parties (rental receivables) in addition to the dividends amounting to SAR 640 million in FY2019, settled by adjusting the amount that was due to the Ultimate Parent Company.
• Cash used in Investing Activities reached SAR 463.7 million in FY2020, down by 33.7% compared to SAR 699.1 million in FY2019, primarily due to a decrease in the advances to a contractor.
• On 17 May 2020, ACC’s Board of Directors approved the appointment of Mr. Faisal Abdullah Al Jedaie as the Company’s new Chief Executive Officer. ACC’s previous CEO, Olivier Nougarou will continue to serve the Company in the role of Senior Advisor to Mr. Al Jedaie and the Board of Directors for strategy and growth. Mr. Al Jedaie has had a distinguished career with a wide-ranging experience in the field of business management, spanning over 30 years in the field of retail and fashion. He was the founder of NESK LLC, which held the franchises of many international brands such as Mango, Stradivarius and Cortefeil. Mr. Al Jedaie is currently the Chairman of Thobe Al Aseel Company and is a member of the Board of Directors of Al Mubarak Real Estate Income Fund operated by Arab National Bank.