Amlak net profit up 15%

Dubai: Amlak Finance, the UAE's biggest home finance company, announced a 15.4 per cent rise in third quarter net profit yesterday as consumers raised money to buy homes in the robust property market.

The Islamic company, 45 per cent owned by property heavyweight Emaar, said it had an unaudited net profit of Dh34.15 million in the July-September quarter after payment to depositors, up from Dh29.6 million in the year-ago third quarter. Revenue jumped 42.4 per cent to Dh107.46 million.

But compared to the second quarter, when the company posted a net profit of Dh42.9 million, profit was down 20.4 per cent.

"The performance reflects the continued growth of real estate in the UAE. It also proves Amlak's diversification strategy has yielded fruitful results," Mohammad Ali Al Hashimi, Amlak Finance's chief executive, said in the statement.

He said the real estate market was healthy and there was growing international interest in Dubai's property industry.

Ahead of the results, Amlak's shares closed 1.23 per cent lower at Dh7.25, while the Dubai market index ended 1.7 per cent lower. Amlak's shares now trade at a price-earnings multiple of 72.5 to its annualised 2006 per-share earnings of Dh0.10.

In the second quarter to June, Amlak's net profit jumped 40.5 per cent while revenue climbed 80.8 per cent to Dh100.64 million. In the nine months to September, net profit after depositors' shares, rose 43 per cent to Dh115 million while revenues surged 71 per cent to Dh290 million.

Diversification

"Amlak's growth plan for the third quarter of 2006 has been in line with the company's strategic vision of diversifying its portfolio by offering a range of innovative Sharia compliant products and services," Al Hashimi said.

Amlak Bonus for refinance also made a significant difference to the existing business, the company said. The product has helped many people chance upon high liquidity with minimum risks.

The UAE's home loan market, in which about 15 banks and home finance companies compete, is poised to expand nearly 50 per cent in 2006 to Dh11.5-12 billion from Dh8 billion in 2005. Two Islamic home finance companies, Amlak and Tamweel, control about 75-77 per cent of the market.

Brokerage EFG-Hermes has forecast Amlak's net profit will rise to Dh145.4 million in 2006.