Retal's revenue hit a record as work on its projects moved ahead. (Retal)
One of Saudi Arabia's fast-growing homebuilders brought in more revenue than ever in the third quarter, but rising costs to finish its projects ate into profit.
Retal Urban Development, a developer based in Al Khobar, made a net profit of 51.7 million Riyal ($13.8 million) in the three months to September, down 6.8% from $14.8 million a year earlier, the company said in a filing on Wednesday.
Revenue rose 13.1% to $204 million, its highest for any quarter.
The company also swung back to profit after losing $4.6 million in the second quarter.
What drove sales: revenue from development contracts rose 14.2%, also a record, as work moved ahead on projects already under way.
What hurt profit: the cost of revenue rose because Retal sold a different mix of homes and spent more delivering finished projects. Operating expenses climbed 23.4%.
What helped: a $4.6 million gain from starting to wind down a fund it partly owns, plus a bigger share of profit from associate companies.
Nine months in: revenue rose 13.8% to $525.5 million, but profit halved to $25 million. Gross profit fell 7.5%.
Operating costs jumped 25.9%, as Retal spent more chasing what it called strategic property opportunities and marketing at real estate exhibitions.
Why it matters: buyers are still showing up despite the war. But finishing homes is getting more expensive, and builders are absorbing the cost.
What to watch: whether Riyadh's push to get idle land developed brings Retal new projects.
For more on Riyadh's push to free up land, read Land Fees Unlock Room for 70,000 Riyadh Homes as Owners Team Up.
