National Real Estate Company. Earnings Presentation Q1 FY2014

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National Real Estate Company (Kuwait KSE: NRE) Earnings Presentation Q1 FY2014 May 28, 2014 1

Agenda 1. NREC Overview 3 2. Q1 FY2014 Summary 4 3. Financial Performance 5 4. Key Financial Ratios 7 5. Quarterly Performance Trends 8 6. Portfolio Overview 10 7. Financial Statements 15 2

NREC Overview Established in 1973 in Kuwait, the National Real Estate Company (NREC) is a listed real estate and investment company with a presence in the Middle East and North Africa (MENA) region NREC is primarily involved in the acquisition, development, sale and management of commercial and industrial real estate across asset classes Souq Sharq Waterfront, Kuwait The Company s portfolio of projects includes office space, mixed use centres, industrial parks, residential communities and super-regional malls High profile developments across the MENA region include: Grand Heights, Egypt o o o o Souq Sharq: The first water front shoppingmall in Sharq, Kuwait Grand Heights: Residential development of 3.8 million m 2 in Cairo, Egypt Palm City: An exclusive residential community of 400 units in Tripoli, Libya The Reem Mall: Super regional mall under development in Abu Dhabi, UAE Palm City, Lybia Strong presence in the region: Egypt, Jordan, Kurdistan, Lebanon, Libya and UAE NREC is the largest shareholder (22.4%) of Agility a top 10 global logistics leader The Reem Mall, UAE 2013 Total Assets $1.9 billion Market Capitalization $450 million 2013 Net Profit $55.0 million 3

Q1 FY2014 Summary Year-over-Year Financial Highlights Net Revenue from Operations increased by 142% to KD 5.5 million Well balanced revenue streams with Rental Income to Sale of Inventory Properties ratio of 48:52 Rental Income of KD 2.6 million, an increase of 16.9% y-o-y Operating Profit increased by 46.7% to KD 4.7 million Net Profit increased by 63.3% to KD 4.4 million Return on Equity improved sequential quarter basis from 6.3% to 9.3% Chairman s Message NREC has sharpened its strategic direction to be a MENA focused real estate company with a new mission statement: To deliver andmanage a built environment at a global standard in the MENA region creating value for shareholders, customers and the communities where we operate The significant improvement in return on equity during the quarter clearly demonstrates the success of management s efforts and ongoing commitment to enhancing shareholder value. Jamil Sultan Al-Essa CEO s Perspective We are delighted to announce a robust set of quarterly financial results, with operating profit growth of over 45%. We continue to build upon this momentum by ensuring we meet project operational targets which in turn will enhance revenues going forward. Sam Sidiqi 4

Financial Performance Q1 y-o-y Full Year y-o-y (KD 000) FY2014 FY2013 Growth (%) FY2013 FY2012 Growth (%) Net Revenue from Operations 5,448 2,251 142.0% 17,680 12,684 39.4% Other Operating Income 3,376 3,024 11.7% 17,612 14,466 21.7% Operating Profit 4,689 3,196 46.7% 20,361 15,384 32.3% Profit After Tax (PAT) 4,393 2,691 63.3% 16,820 7,667 119.4% Basic EPS (Fils) 5.14 3.33 54.4% 18.86 9.63 95.8% Note: 1. Net Revenue from Operations include Rental Income and Sale of Inventory Properties 2. Other Operating Income include Share of Results from an Associate, Share of Results from a Joint Venture and Net Investment Income 3. Operating Profit includes Revenue from Operations and Other Operating Income; excludes Interest and Depreciation 5

Financial Performance o Net Revenue: o Q1 FY2014 Net Revenue increased from KD 2.2 million to KD 5.5 million, primarily driven by the Sale of Inventory Properties o Egypt contributed to 74% of the inventory properties sold in Q1 2014 and Lebanon accounted for 26% o Rental Income grew by 16.9% y-o-y as both occupancy and rental rates increased during the quarter. From a regional perspective, rental income from Kuwait increased by 15.5% and Jordan by 19.0% o Operating Profit: o o Year over Year Performance Discussion Q1 FY2014 Operating Profit increased by 46.7% y-o-y as a result of the strong sales performance in Egypt and Lebanon, complementing the underlying cash flows from the rental portfolio. NREC s Associate and Joint Venture reported an Operating Profit increase of 10.4% and 14.9%, respectively during the quarter KD 2,817 52% Revenue Contribution (KD 000) KD 2,631 48% o Net Profit: o Q1 FY2014 Net Profit increased by 63.3% y-o-y primarily due to the Sale of Inventory Properties in Egypt o Interest expense decreased significantly by (32.6)% y-o-y Rental Income Sale of Inventory Properties 6

Key Financial Ratios (KD 000) Q1 FY2014 Q4 FY2013 Valuation Short Term Borrowings 113,294 111,627 221 Long Term Borrowings 66,000 66,000 Total Debt 179,294 177,627 Less: Cash & Cash Equivalents (10,540) (7,203) Net Debt / (Net Cash) 168,754 170,425 199 210 Net Worth 202,614 199,255 Q1 FY2012 Q1 FY2013 Q1 FY2014 Book Value per Share (Fils) Credit Ratios Return Ratios 9.3% 1.13 0.50 1.05 1.00 5.3% 6.3% 0.29 0.25 Q1 FY2012 Q1 FY2013 Q1 FY2014 Current Ratio (x) Net Debt to Equity (x) 3.2% 1.7% 2.1% Q1 FY2012 Q1 FY2013 Q1 FY2014 ROE (%) ROA (%) 7

Quarterly Performance Trends Revenue from Operations (KD 000) Other Operating Income (KD 000) 17,680 17,612 11,397 2,251 4,584 6,966 5,448 3,024 7,107 3,376 Q1 FY13 H1 FY13 9M FY13 FY13 Q1 FY14 Operating Profit (KD 000) 20,361 Q1 FY13 H1 FY13 9M FY13 FY13 Q1 FY14 PAT (KD 000) 16,820 3,196 7,562 11,996 4,689 2,691 6,784 9,440 4,393 Q1 FY13 H1 FY13 9M FY13 FY13 Q1 FY14 Q1 FY13 H1 FY13 9M FY13 FY13 Q1 FY14 Note: 1. Net Revenue from Operations include Rental Income and Sale of Inventory Properties 2. Other Operating Income include Share of Results from an Associate, Share of Results from a Joint Venture and Net Investment Income 3. Operating Profit includes Revenue from Operations and Other Operating Income; excludes Interest and Depreciation 8

Quarterly Performance Trends Real Estate & Other Operations Segment Revenue by Services 45.2% 51.7% 46.9% 48.4% 51.1% 39.4% 36.2% 100.0% 100.0% 100.0% 54.8% 48.3% 53.1% 51.6% 48.9% 60.6% 63.8% Q1 FY13 H1 FY13 9M FY13 FY13 Q1 FY14 Rental Income Sale of Inventory Properties Real Estate & Other Operations (KD 000) Q1 FY13 H1 FY13 9M FY13 FY13 Q1 FY14 Real Estate & Other Operations Investments Investments (KD 000) 19,417 21,041 20,304 13,697 10,131 9,519 3,420 5,959 3,025 3,376 Q1 FY13 H1 FY13 9M FY13 FY13 Q1 FY14 Q1 FY13 H1 FY13 9M FY13 FY13 Q1 FY14 Note: 1. Segment Revenue includes Revenue from Operations, an Associate, Joint Venture and Net Investment Income 9

Strategic Investments o Operates as a provider of integrated logistics, freight forwarding and specialty services across 100 countries o Two main businesses: Agility Global Integrated Logistics and Agility Infrastructure Market Cap FY2013 Revenue FY2013 Net Income NREC s Interest 22.3% Accounting Agility at a Glance KD 900 Million KD 1,375.6 Million KD 46.2 Million Associate Operating Profit Contribution (KD 000) o Joint venture between NREC and the Corinthia Group o Established with a focus of investing in real estate development projects primarily in Libya and North Africa Market Cap (Not Listed) FY2013 Revenue FY2013 Net Income NREC s Interest 50.0% Accounting MIH at a Glance KD 59.7 Million KD 11.6 Million KD 5.1 Million Joint Venture Operating Profit Contribution (KD 000) KD 2,179 46% KD 754 35% KD 2,510 54% KD 1,425 65% Profit from Associate Real Estate Operating Profit Profit from Joint Venture Developments Profit from Operations (excl Associates) 10

MENA Geographical Focus Successful track record of developing real estate projects in the MENA region 100% Lebanon Iraq 51% Kuwait 100% Libya Egypt Jordan 70% UAE 79% 50% 100% Represents NREC shareholding 11

Development Portfolio Egypt Egypt Lebanon Lebanon Current Sales Grand Heights - 1 Total Area 1 : 3.7 million m² Type: Residential Villa Units Sold: 221 Villas Area Sold: 100% Est. Completion: 2015 Grand Heights - 2 Total Area 1 : 3.7 million m² Type: Residential villa Units Sold: 181 Villas Area Sold: 70% Est. Completion: 2016 West End Total Area: 8,000 m² Type: Commercial Offices Units Sold: 10 Area Sold: 61% Completion: 2013 Pearl Total Area: 7,700 m² Type: Commercial Offices Units Sold: 32 Area Sold: 63% Est. Completion: Q2 2014 Libya Libya UAE Jordan Future Sales Medina Tower Total Area: 11,000 m² Palm Waterfront Total Area: 61,000 m² Carina Views Total Area: 125,000 m² The North Project Total Area: 534,000 m² Type: Residential & commercial complex Type: Mixed-use Type: Commercial complex Type: Commercial, residential, hotel, exhibition centre Note: 1. Represents total area of the Grand Heights project 2. Est. Completion indicates project completion date 12

Kuwait Rental Portfolio Shopping / Resorts Commercial Complex Souq Sharq Waterfront Dasman Complex Wataniya Tower Total Area: 31,460 m² Use: Retail shops Occupancy: 97% Completion: 1998 El Joan Resort Total Area: 17,009 m² Use: Commercial complex Occupancy: 99% Completion: 1979 Bobyan Complex Total Area: 3,363 m² Use: Commercial complex Occupancy: 99% Completion: 1989 Mishal Tower Total Area: 9,875 m² Use: Resort Occupancy: 94% Completion: 2002 Total Area: 10,330 m² Use: Commercial complex Occupancy: 99% Completion: 1993 Total Area: 3,696 m² Use: Commercial offices Occupancy: 96% Completion: 2008 Note: Total Area represents Leasable Area 13

International Rental Portfolio Residential / Industrials Libya Jordan Palm City Residence Total Area: 141,000 m² Use: Residential villa, mixed use Occupancy: 97% Completion: 2010 Under Development The South Project Total Area: 1.5 million m² Use: Modern and qualified warehousing Units Occupancy: 92% Est. Completion: 2015 Kurdistan UAE Erbil City Total Area: 15,300 m² Use: Hypermarket Est. Completion: 2014 Note: Total Area represents Leasable Area Reem Mall Total Area: 190,000 m² Use: Commercial complex Est. Completion: 2018 14

Financial Statements Comparative Consolidated Income Statement Income Statement Q1 FY2013 Q1 FY2014 Rental Revenues 2,251,496 2,631,391 Sale of Real Estate inventory properties 0 2,817,059 Total revenue 2,251,496 5,448,449 General and administrative expenses (836,956) (1,364,074) Staff Expense (1,241,864) (992,754) Carrying values Real Estate inventory properties sold 0 (1,772,129) Total cost of revenue (2,078,819) (4,128,958) Gross profit 172,677 1,319,491 Net investments income 94,079 111,601 Other income 581,993 504,440 Operational ebitda 848,749 1,935,532 Depreciation (126,543) (76,346) Interest income 36,958 34,578 Finance Cost (958,420) (646,281) Profit For The Year Before Taxation & Results Of Associate (199,255) 1,247,483 Share of results of Associate 2,273,775 2,510,245 Share of results of Joint Venture 656,707 754,320 Tax (22,629) (101,097) BOD Fees (17,500) (17,500) Profit For The Year 2,691,098 4,393,451 Non-controlling interests 19,918 (212,702) Equity Holders Of The Parent Company 2,711,015 4,180,748 EPS 3.33 Fils 5.14 Fil 15

Financial Statements Consolidated Statement of Financial Position - Assets Assets 31-Mar-13 31-Dec-13 31-Mar-14 Bank balances and cash 5,939,165 7,202,610 10,539,833 Investments Available For Sale 4,506,904 3,614,757 3,271,258 Accounts receivable and prepayments 8,709,893 9,702,849 11,258,157 Properties held for trading 20,962,140 21,286,729 20,669,812 Investment in Associate (Agility) 176,442,875 172,360,035 174,872,671 Investment in Joint Venture (MIH) 28,532,875 32,060,319 32,814,639 Properties under development 118,190,576 117,859,420 118,813,489 Investment properties 141,107,248 152,154,412 152,823,246 Property, Plant & Equipment 5,837,550 5,790,439 5,724,277 Total Assets 510,229,226 522,031,570 530,787,382 16

Financial Statements Consolidated Statement of Financial Position - Liabilities Liabilities 31-Mar-13 31-Dec-13 31-Mar-14 Accounts payable and accruals 135,807,508 144,006,500 144,006,500 Bank borrowings 180,266,378 177,627,487 177,627,487 Employees terminal benefits 1,169,172 1,142,450 1,142,450 Total Liabilities 317,243,059 322,776,437 322,776,437 Minority Interest 22,070,470 22,679,239 22,679,239 Shareholders Funds Share capital 81,419,504 85,490,479 85,490,479 Statutory reserve 40,093,989 41,671,651 41,671,651 Treasury shares (7,405,861) (7,405,861) (7,405,861) Treasury shares reserve 12,857,601 12,857,601 12,857,601 Effects of changes in other comprehensive income of associate's (10,424,218) (15,540,953) (15,540,953) Foreign Currency Translation Reserve (7,219,383) (9,475,869) (9,813,714) Retained earnings 61,594,064 68,978,845 72,517,067 Total Shareholders Funds 170,915,695 176,575,893 179,776,270 Total Liabilities, Minority Interest and Shareholders Funds 510,229,223 522,031,569 530,787,384 17

Financial Statements Consolidated Cash Flow Statement Q1 FY2014 Q1 FY2013 Cash Flows from Operating Activities: Profit for the period before taxation and Board of Directors remuneration 4,512,049 2,731,225 Adjustments for: Share of results from an associate (2,510,245) (2,273,775) Share of results from a joint venture (754,320) (656,707) Net investment income (111,601) (94,079) Interest income (34,578) (36,958) Interest expense 646,281 958,420 Depreciation 76,347 126,543 Gain on sale of property and equipment - (7,543) Provision for employees end of service benefits 103,600 173,278 1,927,533 920,404 Changes in operating assets and liabilities: Inventory properties held 1,756,689 (2,534) Payment for properties under development (1,022,668) (1,161,615) Payment for lands installments (398,000) (842,000) Payment for investment properties (136,176) (27,152) Accounts receivable and prepayments (1,555,306) (591,077) Accounts payable and accruals 1,482,688 (3,969,620) Cash generated from (used in) operations 2,054,760 (5,673,594) Payment for employees end of service benefits (52,097) (71,118) Taxes paid (21,256) - Net cash generated from (used in) operating activities 1,981,407 (5,744,712) 18

Financial Statements Consolidated Cash Flow Statement Q1 FY2014 Q1 FY2013 Cash Flows from Investing Activities: Purchase of property and equipment (172,193) (91,063) Proceed from sale of property and equipment - 7,543 Proceeds from sale of investments available for sale 548,834 308,966 Interest income received 34,578 36,958 Net cash generated from investing activities 411,219 262,404 Cash Flows from Financing Activities: Net movement on loans and borrowings 1,666,519 (2,284,419) Interest expense paid (2,129,135) (2,215,021) Dividends paid (15,000) (84,361) Net cash used in financing activities (477,616) (4,583,801) Net increase (decrease) in cash and cash equivalents 1,915,010 (10,066,109) Foreign currency translation adjustments 1,422,213 5,510,181 Cash and cash equivalents at beginning of the period 7,202,610 10,495,093 Cash and cash equivalents at end of the period 10,539,833 5,939,165 Accounting Notes: 1. Exchange Rate: I USD = 0.279 KD 2. ROA: Annualized Net Profit/TotalAssets 3. ROE: Annualized Net Profit/ Equity 4. Net Debt to Equity: Net Debt from Financial Institution / Equity 19

Shiv Hiremath National Real Estate Co. s.hiremath@nrec.com.kw Disclaimer: John Nelson Deepak Balwani Churchgate Partners nrec@churchgatepartnersindia.com +91 22 3953 7444 This presentation contains statements that contain forward looking statements including, but without limitation, statements relating to the implementation of strategic initiatives, and other statements relating to National Real Estate Company s ( NREC or the Company ) future business developments and economic performance. While these forward looking statements indicate our assessment and future expectations concerning the development of our business, a number of risks, uncertainties and other unknown factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to, general market, macroeconomic, governmental and regulatory trends, movements in currency exchange and interest rates, competitive pressures, technological developments, changes in the financial conditions of third parties dealing with us, legislative developments, and other key factors that could affect our business and financial performance. NREC undertakes no obligation or shall not be liable for any indirect, special, incidental or consequential damages resulted of any reason hereof on liabilities of any nature NATIONAL whatsoever REAL ESTATE to publicly COMPANY revise any KSCforward looking statements 20