June 22, 2020 / 8:34 AM / 23 days ago

Saudi Jabal Omar posts third straight quarterly loss as coronavirus bites

RIYADH, June 22 (Reuters) - Saudi Arabia’s Jabal Omar Development Co., one of the kingdom’s largest listed property developers, reported a third straight quarterly loss on Monday as the coronavirus pandemic hit operations.

The company posted a net loss of 217.25 million riyals ($57.93 million) in its first quarter to March 31, 2020 as selling and marketing operations declined, compared to a profit of 1.62 million riyals a year ago.

At March 31, the group’s current liabilities exceeded its current assets by 442 million riyals, according to a local stockmarket filing.

“A material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern,” the filing said, referring to a note from the company’s external auditor.

Jabal Omar could not immediately be reached for comment.

The company operates a flagship complex of hotels, residential and commercial property within walking distance of the Grand Mosque in the Muslim holy city of Mecca.

The kingdom suspended Umrah pilgrimage visits to Mecca in March to prevent the spread of the novel coronavirus.

“The lockdown in Mecca, the suspension of Umrah and visits to the city as well as uncertainty over Haj due to COVID-19 will have a long-term negative impact on the company’s operations, given its high leverage,” said an analyst in Riyadh.

In May, the company said the force majeure resulting from coronavirus pandemic as well as preventive measures to fight the pandemic had has resulted in a lack of revenues from hotels and retail space.

Jabal Omar’s shares were around 2% lower on Monday and down around 30% from this year’s highs hit in February.

Reporting by Marwa Rashad; Editing by Kirsten Donovan

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