In the Name of Allah Most Gracious, Most Passionate Chairman's Speech – AL Madinah Company 2011
Praise be to Allah, Lord of the worlds and peace, blessings be upon the most honorable Prophet and messenger, his family and companions.
Peace, mercy and blessings of Allah be upon you
On behalf of my fellow members of the Board of Directors, Executive Management and all employees of Al Madina Finance & Investment Company, it pleases me to welcome you to review the achievements of your company for the fiscal year ended 31 December, 2011. The Middle East and North Africa region has witnessed political turbulence which greatly impacted other aspects . The economic aspect was a part of these turbulence and their implications. The region was on path to recovery from the global crisis until late 2010, when growth accelerated to reach 3.9% in 2010 after reaching 2.1% in 2009 based mainly on the performance of oil-exporting countries in the region. Economic activity remained relatively strong throughout the third quarter of the year, with increased gross domestic product at an average of 3.5% calculated on an annual basis. The global economic recovery is now at a risk as a result of increased tensions in the Euro area and vulnerabilities in other parts of the world as well as recession recorded in the Euro zone at 0.3% in the third quarter of 2011. This was followed by some depressions that mean the region has again witnessed recession but the world output is expected to increase at 3.25% in 2012. In spite of all these circumstances on the international level, the closing accounts for the financial year 2010/2011 showed that Kuwait achieved a large surplus worth 5.3 billion Kuwaiti dinars before deducting Future Generations Fund reserves despite the high expenses reaching 16.2 billion dinars, that is 44% more than the previous year. National Bank of Kuwait forecasts indicate that Kuwait will achieve a surplus of approximately 9 billion dinars in new fiscal year, 2012. At the level of the real estate sector, sales amounted 2.7 billion dinars and with an increase of 35% from previous year 2010 the growth rate of 52% is due to the sales performance of the investment sector. At the Company was able to reduce its losses 69% with loss amounting to only KD(2,551,773) in 2011 compared to loss amounting to KD(8,242,883) in 2010. The bigger part of this remarkable development is due to the efforts done by the Company to conclude a settlement agreement of advance payments for the purchase of properties under development. The settlement was made in exchange for real estate of fair value amounting KD 11 million and a credit balance of KD 1.7 million was reported. This transaction resulted in reversal of impairment provisions of KD 9.4. In addition, the company exited from quoted and unquoted shares and decreasing total obligations of KD 6 Million i.e. 10% of its debt balances amounting KD 58.3 million in 2011. Thus the Company reduced finance burdens by 18.5%, reaching KD 2.6 million in 2011 compared to KD 3.2 million in 2010.
In addition to the above, Al Madina Company was able to raise revenues through service contracts by 60.5% to amount KD 1.5 million in 2011 compared to less than one million Kuwaiti dinars in 2010. The real estate investments increased at 26.2% to reach to KD 64.2 million in 2011 compared to KD 50.9 million in 2010. While the Company’s investments were raising, the company was able to reduce its expenses and staff costs by 14% to reach KD 1.9 million compared to KD 2.2 million.
This is concerning the performance of the company in 2011. The Company is still working to push forward its strategic plan to improve performance and develop its business and enter into new investment opportunities for making profits for its shareholders by becoming more flexible and capable of bearing the financial conditions of the new global economy. This will be achieved through diversity of the Company investments in terms of segments and geographical distribution thus redistributing investment risks. In the end, I would like to extend my deep thanks and appreciation to members of the Board of Directors and members of the Sharia Board, and executive management for their support and efforts. I also extend my sincere thanks to all the investors who trusted Al Madina Finance and Investment Company and all the company employees for their effort and hard work that accomplished the said achievements.
May Allah peace, mercy and blessings be upon you.
Khaled Yacoub AL Mutawa
Chairman & Managing Director