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Jabal Omar Development Co. announces its Interim Financial Results for the Period Ending on 2022-03-31 ( Three Months )

ELEMENT LISTCURRENT QUARTERSIMILAR QUARTER FOR PREVIOUS YEAR%CHANGEPREVIOUS QUARTER%CHANGE
Sales/Revenue109.6521.57408.344168.38-34.879
Gross Profit (Loss)-25.74-88.45-70.898-24.584.719
Operational Profit (Loss)-72.23-137.57-47.495-35.37104.212
Net Profit (Loss) after Zakat and Tax-182.46-345.3-47.1581,290.98-
Total Comprehensive Income-182.46-345.3-47.1581,293.47-
All figures are in (Millions) Saudi Arabia, Riyals

ELEMENT LISTCURRENT PERIODSIMILAR PERIOD FOR PREVIOUS YEAR%CHANGE
Total Share Holders Equity (after Deducting Minority Equity)8,444.266,643.0427.114
Profit (Loss) per Share-0.2-0.37-
All figures are in (Millions) Saudi Arabia, Riyals

ACCUMULATED LOSSESCAPITALPERCENTAGE %
1,3629,29414.65
All figures are in (Millions) Saudi Arabia, Riyals

ELEMENT LISTEXPLANATION
The reason of the increase (decrease) in the net profit during the current quarter compared to the same quarter of the last year is The reason for net loss in current quarter compared to the same quarter of the previous year is mainly attributed to the following:
During current quarter, business operations gained momentum in hotels and malls compared to same quarter last year. However, fixed nature of the cost of revenues has resulted in gross loss. The overall gross loss has decreased by 71% compared to same quarter last year.

General & administrative expense has decreased by 27% compared to last quarter mainly derived by cost control measures adopted by the company.

Finance costs overall has decreased by 47%, mainly attributable to settlement of loans and conversion of MOF SR 1.5B loan to perpetual instrument.
The reason of the increase (decrease) in the net profit during the current quarter compared to the previous period of the current year is The reason of the net loss during the current quarter compared to the net profit in the previous quarter:
1- Decrease in gain on disposal of non-current asset due to gain recognized in last quarter on sale of plot of land which was announced on Tadawal on 30-09 2021.

2- Decrease in net gain on loan restructuring due to gain recognized in last quarter on restructuring of loans.
Statement of the type of external auditor's reportQualified conclusion
Modification, Qualification or Emphasis of a Matter as Stated within the External Auditor OpinionQualified conclusion
Modification, Qualification or Emphasis of a Matter as Stated within the External Auditor Opinion As of 31 March 2022, the net carrying value of property, plant and equipment and investment properties (collectively “the Assets”) reported in the Group’s interim condensed consolidated statement of financial position amounted to SR 19,582 million and SR 5,023 million, respectively. In view of substantial reduction in cash generated from the Group’s hotels and other commercial operations, as well as the interruption in the development of the Group’s real estate projects primarily due to the outbreak of COVID-19 pandemic, the Group’s management performed an impairment assessment on its Assets as of 31 March 2022 by comparing the Assets’ carrying values with the recoverable amount, being the higher of fair value less costs to sell and value-in-use (VIU). Accordingly, the Group’s management performed an impairment assessment (including using an external valuer) to determine the fair values of the assets and carried out an internal assessment to determine the VIU. As a result of the Group management’s assessment, it concluded that no impairment provision is required on its Assets as of 31 March 2022. We reviewed and challenged the significant judgments, assumptions and estimates used by the Group’s management including its determination of the appropriate valuation methodologies, and noted that in our view recoverable values of certain Assets that comprised property, plant and equipment and investment properties with net carrying values of SR 5,640 million and SR 273 million, respectively as at 31 March 2022, were determined mainly using cost approach, while a permitted valuation approach by the applicable accounting standards, is not appropriate considering the nature and current and expected use of the Assets.
We also noted that certain significant assumptions used in the calculation of certain Asset’s VIUs and fair values using income approach were not supported by reasonable basis. Had the Group management used valuation methodology that is aligned with the requirements of the applicable accounting framework, as well as assumptions that are reasonably supported, certain elements in the accompanying interim condensed consolidated financial statements together with the related disclosures would have been materially affected. The effects on the interim condensed consolidated financial statements have not been determined.

Based on our review, with the exception of the matter described in the preceding paragraph, nothing has come to our attention that causes us to believe that the accompanying interim condensed consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34 as endorsed in the Kingdom of Saudi Arabia.

We draw attention to note 1 to the interim condensed consolidated financial statements, which indicates that the Group incurred a loss of SR 182 million and negative operating cash flows amounting to SR 116 million during the three-month period ended 31 March 2022. In addition, the Group’s current liabilities exceeded its current assets by SR 1,699 million and the Group had accumulated losses amounting to SR 1,362 million as at 31 March 2022. As stated in note 1, these events or conditions, along with other matters as set forth in note 1, indicate that a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern. Our conclusion is not modified in respect of this matter.
Reclassification of Comparison ItemsNot applicable
Additional InformationThe accumulated losses as at 31 March 2022 amounted to SR 1,362 million, equivalent to 15% of the Company's capital compared to accumulated losses as at 31 December 2021 of SR 1,179 million, equivalent to 13% of the Company's capital
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Other Disclosures

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