Dubai: Amlak Finance, the Sharia-compliant mortgage lender, said on Wednesday it recorded a net profit attributable to its equity holders of Dh59 million in 2014 after completion of restructuring process in November as it disclosed the results for the first time in six years.
The company recorded a net profit attributable to equity holders of Dh240 million in 2008.
“The year 2014 was a significant turning point for Amlak Finance. Firstly, we achieved profits for our shareholders, marking a positive turnaround in our business,” said Ali Ebrahim Mohammad, Vice-Chairman of Amlak Finance, in a statement.
“With the completion of the restructuring in November 2014, Amlak is now well placed to resume normal business operations and work towards creating future value for our shareholders once again,” said Mohammad.
Total Revenue fell by two thirds since 2008 as no new assets were written during the six years of restructuring negotiations. Total operating expenses fell by 45 per cent between 2008 and 2014 as a result of cuts in business related activities and staff headcount. Total assets stood at Dh7.3 billion in 2014.
Amlak serves over 3,000 customers with a financing portfolio of over Dh4.2 billion.
Re-listing on DFM
The company plans to have Amlak’s shares readmitted to the Dubai Financial Markets for restart of trading in April 2015, after all regulatory approvals.
“Although the listing took longer than anticipated time, it’s definitely a positive move. This would be taken positively by the markets. The investors would have liquidity in their shares now. This would also have a positively impact the asset quality of banks and related parties,” said Tariq Qaqish, head of asset management at Al Mal Capital.
In 2014, Amlak completed the restructuring of its Dh10 billion balance sheet, which allowed it to create a solid foundation for its recovery and future growth.
Under the 2014 restructuring, Amlak took certain impairments on its real estate investment portfolio. The company also termed out its short term facilities into a 12-year fixed profit facility. As part of the deal, an appropriate security package was also granted to financiers.
The company has paid Dh2.8 billion to its financiers under the restructuring package.
“We are confident that we will continue to generate annual profits, and intend to put Amlak back into a leadership position as a premier and specialised property financing provider,” said Arif Alharmi, Chief Executive Officer, Amlak Finance.
“We will be working to bring full value recovery to all the real estate assets while continuing to repay our financiers and liquidity support providers who not only supported Amlak but also the UAE financial system during a period of market uncertainty,” said Alharmi.
