Dubai: Aldar Properties, Abu Dhabi's property development, investment and management company, posted a net loss of Dh789.5 million for the first six months of 2010, compared to a net profit of Dh1.14 billion for the same period last year as sales declined.
Revenue fell to Dh427 million, compared to Dh1.06 billion for the corresponding period last year, according to a statement released by the company, which attributed the sharp decrease to lower property sales.
Aldar's net asset value stood at Dh15.7 billion on June 30 compared to Dh16.6 billion on December 31, 2009.
The company expects better results for the second half of 2010 on the back of revenue generated from the delivery of the Al Raha Beach and Al Gurm projects. The company also made Dh695 million worth of sales during the first six months of this year which will be recognised in future periods.
Action
Aldar chairman Ahmad Al Sayegh said: "Throughout this period we have taken all the appropriate actions to ensure the business returns to recurrent value creation for all our stakeholders in the near future."
Investment in projects under construction, which consist of investment properties under development and development work in progress, was Dh21.2 billion compared to Dh17.9 billion at the end of 2009.
The company's shares closed at Dh2.45 on the Abu Dhabi Securities Exchange yesterday, up 0.41 per cent from the previous day.
In the second half of 2010, Aldar has targeted the delivery of a number of projects such as the opening of Ferrari World Abu Dhabi, the opening of the Souq at the Central Market, Al Bandar residential development, and the arrival of long leasehold tenants into HQ, the international Grade A office space within Al Raha Beach.
Matthew Green, Head of Research and Consultancy at CB Richard Ellis, told Gulf News that Aldar Properties will improve income after projects are delivered. "Aldar is still developing its assets," he said in a phone interview. "They will be generating an income stream shortly. They have projects like the Central Market and the first units of Al Raha Beach, so their income should start to improve."
Previous profit would have been attributed to the projects, but the market has declined since that period. However, at the moment they still have costs in order to keep their developments going, he said.
Green described the real-estate market as stagnant and that it will remain like that for a while.
"The rest of the year will be pretty much subdued. The market is very much reliant on the economic activity and pretty much everything is obviously linked. Against this kind of backdrop you can't expect the real estate market to come back," he said.
