Barwa Real Estate Co. · QSE:BRES
Barwa Real Estate — Q1 2020 Earnings Presentation
41 slides from Barwa Real Estate's earnings presentation, April 2020
Slide 1: Investor Presentation April 2020
INVESTOR PRESENTATION April 2020 BARWA AL SAAD 1
Slide 2: Disclaimer
DISCLAIMER The information contained herein has been prepared by Barwa Real Estate Company Q.P.S.C.(“Barwa”) relying on information obtained from sources believed to be reliable but Barwa does not guarantee the accuracy or completeness of such information. Except for statements of historical facts,
Slide 3: Discussion Summary
DISCUSSION SUMMARY Barwa At A Glance Investment Rationale Qatar Economy Financial Track Record Annexure 3
Slide 4: Barwa at a Glance
BARWA AT A GLANCE We are one of the leading real estate developers headquartered in Doha, Qatar. We develop and manage properties that reflect the changing needs of the people living, working and visiting the country. Our Vision: To be a reliable Real Estate company, recognized for its strong values
Slide 5: Major Contributor to Qatar's Development
MAJOR CONTRIBUTOR TO QATAR’S DEVELOPMENT Completed 8,148 3.6 mn sq m built-up Leadership in affordable residential units and area under operations housing 37,340 labour rooms Balanced product mix Positive Cash Profits1 ~ 79% Op. Revenue2 is resulting in stable rental since 2014 recurring rentals yie
Slide 6: Investment Rationale
SSS BARWA INVESTMENT RATIONALE
Slide 7: Proxy to Qatar's Real Estate Market
Investing In Barwa PRESENCE ACROSS REAL ESTATE MOVING UP THE 1 6 ECOSYSTEM VALUE CHAIN • Moving towards mid to high-mid residential • Affordable housing solution for families segment in newly developed Lusail city & blue-collared workers • Barwa selects its product offering in • Commercial Propertie
Slide 8: Barwa Real Estate – Portfolio Overview
BARWA REAL ESTATE– PORTFOLIO OVERVIEW RESIDENTIAL COMMERCIAL INDUSTRIAL LABOUR ACCOM. LAND BANK • 264,312 Sq m Retail(Shopping & • 8,148 residential Restorent ) • 445,779 Sq m • 5.4 Million Sq m units & Villas • 68,973 Sq m Office Warehouse & Domestic Land • 701 Hotel Keys • 37,340 labour rooms Work
Slide 9: Balanced Portfolio of Assets
BALANCED PORTFOLIO OF ASSETS Barwa Outperformed Qatar Residential Rental Index over 2016-2019 110 10. 0% 100 100 8.0 % 7.8% 90 6.0 % #4.4% 80 4.0 % 70 71.92.0 % *Yield on operating assets is 8.7% as of Q4 FY19 60 0.0 % Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 2016 2016 2017 2017 2018 2018 2019 2019 KPMG Residential
Slide 10: Inherent Strength Built Over Time Resulted in Strong Brand Preference
Inherent Strength built over time resulted in strong Brand Preference… Timeliness Quality • Proven developer and operator of a range of assets with timely delivery • Quality control is paramount despite tight cost measures • Routine quality checks at various stages of project life cycle • Barwa was
Slide 11: … and Also in Superior Returns
… AND ALSO IN SUPERIOR RETURNS Adj. Operating Margins* Return Ratios* Leverage * 0.56% Barwa 52% Barwa Barwa 41% 0.88% 0.31% Peer 1 Peer 1 48% 0.45% Peer 1 19% 0.24% Peer 2 0.37% Peer 2 62% Peer 2 45% ROA ROE * As on March 2020 11 *Adjusted operating margins= Rental Revenue + Consultancy Revenue + P
Slide 12: Significant Recurring Revenues & Operating Profit
SIGNIFICANT RECURRING REVENUES & OPERATING PROFIT RECURRING INCOME PROVIDES BETTER CASH FLOW VISIBILITY QAR mn 350 166% 93% 92% 90% 339 91% 146% 300 84% 3.6 mn sq.m BUA# under 305 301 304 126% 250 292 106% operation 249 200 230 234 222 86% Rental assets spread across 192 66% 150 43% 51% 44% 62%
Slide 13: Prudent Gearing, Sufficient Room for Leveraged Growth
PRUDENT GEARING, SUFFICIENT ROOM FOR LEVERAGED GROWTH Balance Sheet Strength provides an Opportunity for Leveraged Growth *Recurring Cash Profits have been generated Timely Sale of Properties have adequately supported consistently, providing sufficient liquidity Liquidity 30 1.0 0.9 25 0.8 0.7 20 20
Slide 14: Comfortable Liquidity Position, for Prudent Capital Allocation
COMFORTABLE LIQUIDITY POSITION, FOR PRUDENT CAPITAL ALLOCATION Comfortable Debt Maturity Profile (QAR Mn) 2,308 QAR Million March-20 2,175 Debt 9,281 1,705 Cash 1,018 1,058 1,105 930 Net Debt 8,263 Total Equity 20,204 Total Assets 31,776 2020 2021 2022 2023 2024 Beyond 2024 Liquidity – QAR 3,132 mn
Slide 15: Optimising Shareholder Value
OPTIMISING SHAREHOLDER VALUE Consistency in Cash Profits, Low Leverage has given Consistent Shareholder Returns QAR Mn 8% 61% 8% 57% 57% 973 973 973 7% 856 51% 50% 51% 778 778 778 6% 6% 6% 584 5% 5% 389 31% 31% 28% 3% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2011 2012 2013 2014 2015 2016 2017 20
Slide 16: Enhancing Asset Portfolio
ENHANCING ASSET PORTFOLIO Well Established Adding Diversity Residential & Labour Housing & Education Healthcare Commercial Logistics Sector Sector In-depth understanding Strict implementation Govt allocated QAR Govt allocated QAR of the sector to gauge of law banning 19.2 bn in 2019 (9.3% 22
Slide 17: Premiumisation to Drive Sustained Growth & Better Profitability
PREMIUMISATION TO DRIVE SUSTAINED GROWTH & BETTER PROFITABILITY FREE HOLD ZONES EXPANSION 2004 (3 Zones) 2019 (10 Zones) HOW IT BENEFITS BARWA? District West Bay (Legtaifiya) LAND BANK The Pearl- Qatar 7.7 mn Sq. M 68% in Qatar Al Khor Resort 32% Abroad Rawdat Al Jahaniyah Qatar Land Bank Al Qassar
Slide 18: Qatar Economy
os oe ee eee se —_ SS BARWA Od ie QATAR ECONOMY
Slide 19: Qatar Economy – An Overview
QATAR ECONOMY – AN OVERVIEW QATAR ECONOMY IS EXPECTED TO CONTINUE THE GROWTH MOMENTUM POISED FOR SECULAR AT A GLANCE DEMAND DRIVERS GROWTH • Population – 2.78 million as • Qatar’s natural gas resources are the • Permanent Residency for of Jan 2020 (Source: Planning country’s main economic engine and
Slide 20: Qatar Real Estate – An Overview
QATAR REAL ESTATE – AN OVERVIEW Residential Sector QATAR REAL ESTATE INDEX • Recent law amendment of expanding freehold ownership in residential sector to provide further incentive to foreign owners to have outright owner • Currently facing lower demand on account of rising supply in the market 266.
Slide 21: Demand Drivers
DEMAND DRIVERS Qatar’s successful bid for the World Cup has had a multi-fold positive impact on Qatar’s Economy by acting as a catalyst to Qatar National Vision 2030 accelerate various projects envisaged by the government in area of : 4 PILLARS OF DEVELOPMENT FIFA 2022 • Infrastructure and utilities
Slide 22: Financial Track Record
FINANCIAL TRACK RECORD 22
Slide 23: Financial Overview
FINANCIAL OVERVIEW In QAR Million TOTAL INCOME1 & OP. REVENUE2 OPERATING PROFIT3 267 886 254 254 714 687 662 245 489 397 423 379 387 375 229 Q1 2016 Q1 2017 Q1 2018 Q1 2019 Q1 2020 Total Income Operating Revenue Q1 2016 Q1 2017 Q1 2018 Q1 2019 Q1 2020 EBITDA4 PAT 209 656 204 196 483 407 415 184 175
Slide 24: Q1 2020 Key Highlights
Q1 2020 KEY HIGHLIGHTS 79% op. revenue is from Q1 2020 Operating Q1 2020 Operating Profit recurring rentals Revenue QAR 387 mn QAR 254 mn Q1 2020 Operating 92% of Operating Profits Net Debt at QAR 8.3 bn Margin 52% from net recurring rental Leasing started at Distributed a 20% cash Mukaynis Compound
Slide 25: Q1 2020 Key Highlights
Q1 2020 KEY HIGHLIGHTS Key financial indicators Q1 2020 Q1 2019 % Change Operating Revenue 387 379 2% Operating Profits 254 245 4% Operating Profits Margin 66% 65% - EBITDA 268 499 -46% Non Operating Income* 308 102 -202% Depreciation & Amortization (14) (14) - EBIT 255 485 -47% Finance Cost (Net) (
Slide 26: Q1 2020 vs Q1 2019 Key Highlights
Q1 2020 vs Q1 2019 KEY HIGHLIGHTS Operating Revenues Operating Profits Consultancy Consultancy Consultanc Consultanc 8% 9% y 21% y 21% Rental 92% Rental 91% Rental Rental 79% 79% Q1 2020 Q1 2019 Q1 2020 Q1 2019 26
Slide 27: Balance Sheet & Cash Flow Overview
BALANCE SHEET & CASH FLOW OVERVIEW BALANCE SHEET OVERVIEW CASH FLOW OVERVIEW TOTAL QAR 31,776 mn Investments 1.6% 1.5% 1.0% in Associates Others 1.9% Receivables & 0.4% Prepayments 29.2% 4.8% Lease Intangible liabilities Assets 4.7% Trading 3.2% Properties Obligations 2.1% under Islamic Cash & bank
Slide 28: Ongoing & Recently Completed Projects
ONGOING & RECENTLY COMPLETED PROJECTS PROJECT TIMELINE 2016 2017 2018 2019 2020 2021 Start Finish Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1. Salwa Affordable Housing Dec-17 Jun-20 1.1 Zone 1 Dec-17 May-19 1.2 Zone 2 Dec-17 Aug-19 1.3 Zone 3 & Additional Works Dec-17 A
Slide 29: Upcoming Project Opportunities
UPCOMING PROJECT OPPORTUNITIES Barwa Real Estate is conducting re-feasibility studies and design enhancements for several land banks in order to ensure their best use and derive attractive returns; Barwa Al Baraha Phase 3 Umm Shahrain Extension Barwa City Phase 3 Lusail Golf The company is also
Slide 30: Annexure
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Slide 31: Geographical Distribution of Projects
GEOGRAPHICAL DISTRIBUTION OF PROJECTS ONGOING Salwa Affordable Housing Affordable Housing – Khor Madinat Al Mawater Phase 3 Al Khor Recreation Extension Al Khor Recreation Barwa Salwa – Shell Project Lusail Golf LAND BANK Barwa Salwa Al Khor Extension Dara A Al Wakra Residential Dara B-F Truck
Slide 32: Residential Portfolio
RESIDENTIAL PORTFOLIO Name of Project Residential (Units) Nature of Project Al Khor Community 3,171 Residen al Labor Camp 3* 982 Labor accommoda on Ras Laffan Accomadation-West Side* 688 Labor accommoda on Labor Camp 2* 662 Labor accommoda on Portcabins 451 Phase 2* 493 Labor accommoda on Labor Camp
Slide 33: Mixed Use Portfolio (1/2)
MIXED USE PORTFOLIO (1/2) Residential/Labour Retail Office Hotel Warehouse Name of Project Nature of Project (Units) (‘000 Sq M) (‘000 Sq M) (Keys) (‘000 Sq M) Baraha Warehouses Industrial - - - - 184.8 and Workshop Barwa Al Sadd Mix Use 261 4.2 41.8 232 - Barwa Village Mix Use 457 106.2 - - - Masak
Slide 34: Mixed Use Portfolio (2/2)
MIXED USE PORTFOLIO (2/2) Office Name of Project Nature of Project Residential (Units) Retail (‘000 Sq M) (‘000 Sq M) Barwa Village Expansion Mix Use 177 10.7 - (Mukaynis Compound) * Mix Use 25,360 13.3 5.4 Salwa Affordable Housing Development Mesaieed Mix Use 138 12.3 7.1 Old Slatah Building Mix Us
Slide 35: International Portfolio
INTERNATIONAL PORTFOLIO Office Name of Project Nature of Project (‘000 Sq M) Cavendish Office 1.0 North Row Office 2.2 35
Slide 36: Project Status
PROJECT STATUS AL KHOR RECREATION EXTENSION BARAHA WAREHOUSES & WORKSHOPS Land Area (sq. m.) 69,757 Land Area (sq. m.) 684,134 BUA (sq. m.) 53,639 BUA (sq. m.) 187,051 Construction Start Date Jul-18 Construction Start Date Aug-17 Construction End Date Dec-19* Construction End Date Sep-19 36 * * Cons
Slide 37: Project Status
PROJECT STATUS MUKAYNIS COMPOUND DARA A AFFORDABLE HOUSING – SALWA Land Area (sq. m.) 16,415 Land Area (sq. m.) 1,179,114 BUA (sq. m.) 54,625 BUA (sq. m.) 735,091 Construction Start Date Aug-16 Construction Start Date Dec-17 Construction End Date Dec-19* Construction End Date Aug-20 * The constructi
Slide 38: Project Status
PROJECT STATUS MADINAT AL MAWATER – PHASE 3 Land Area (sq. m.) 417,407 BUA (sq. m.) 167,072 Construction Start Date Aug - 19 Construction End Date Jul-21 38
Slide 39: Domestic Land Bank
DOMESTIC LAND BANK Owned Area (‘000 Sq M) Lusail (Golf) 3,476 Baraha 3 523 DARA B-F 130 Al Khor Zone 7 54 Barwa Al Doha Phase A 48 Alaqaria Delta Center 38 Lehwaila Beach Club 28 Asas Marina Tower 28 Alaqaria South Gate 28 Al-kharaej Residential Tower 4 Leased Area (‘000 Sq M) Barwa City Phase 3 330
Slide 40: International Land Bank
INTERNATIONAL LAND BANK Land* Area (‘000 Sq M) Country Bahrain Bay 12.5 Bahrain Cyprus Land 38.2 Cyprus Marrakech* 9.6 Morocco Fez * 3.1 Morocco Astrakhan - Russia 150.0 Russia Riyadh Land Development 2,216.1 Saudi Arabia Total 2,429.5 *Includes pre-existing structures 40
Slide 41: Contact: barwa.com.qa
Mr. Khalid Al Moathen Acting Investor Relation Manger Contact : +974 44088785 Email : khalid.almoathen@barwa.com.qa barwa.com.qa barwa.com.qa 41
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