Dar Al Arkan management (Mika Tiovla, CFO, Amr Sager, IR Director) held a conference call yesterday to discuss 1Q16. Below are the main highlights from the call:   Despite the economic slowdown in Saudi Arabia, housing remains a priority for the government. Also, long-term story is intact, driven by high demand levels (estimated at c200,000 new homes per annum), household size decrease and housing shortage of affordable housing Supportive factors for 2016 include: i) Real Estate Development Fund (REDF) approved SAR15 billion in real estate loans in 2015; ii) widening of LTV ratio from 70% to 85%, allowing for more leverage; and iii) minimal risk seen from vacant land fees, given that the majority of Dar Al Arkan’s land bank fall under “developed land ready to be sold” and “land under development” Strategy going forward: Increase occupancy on current asset base to reach full occupancy in 2017, when revenue is expected to reach SAR240 million, with 60% in margins; ii) deliver gated community and residential units for leasing from ongoing development projects to contribute to revenue from 2019 and onwards; and iii) not looking to acquire new land Revenue was down 40% Y-o-Y in 1Q16, on the back of slower land trading volumes. 398,000 sqm of land was sold at an average price of SAR1,000/sqm in 1Q16, down from 700,000 sqm at SAR900/sqm in 1Q15, but the comparison is not fair, given different locations of land plots. Management expects another weak quarter, while in 2H2016 when more clarity is obtained on white land tax, the company expects land sales to improve Gross profit margin was 44% (guidance: above 40%, 1Q15: 46%), on a strategy to not sacrifice margins for higher revenue. Interest expense was down 20% Y-o-Y, due to repayment of high cost sukuk. Receivables collection in 1Q2016 has shown an improvement over 4Q2015 Ready for sukuk repayment in 2016, amounting to SAR1.1 billion. Cash balance is at SAR1.48 billion, gross debt to capitalisation at 26% Increased rental rates at Al-Qasr community, which resulted in lower occupancy rate to 49%, down from 51% in December. Looking to do the same at Al Qasr Mall, which is expected to help the bottom-line, despite lower occupancy rates Planning to tweak the master plan for Shams Ar-Riyadh, which will be launched after the changes are approved in 2Q-3Q16, design works are ongoing, with sales set to commence in early 2017, and delivery starting in 2019   (Company conference call, Mai Attia, Sara Boutros)