Real estate: Aldar’s Q1 profit, revenues plunge

Abu Dhabi: Aldar Properties, Abu Dhabi’s largest real estate developer by market capitalisation, yesterday posted a first quarter profit of Dh154.3 million, down from Dh478.2 million in the corresponding period a year ago, while revenue fell to Dh1.62 billion from Dh3.59 billion last year.

“Revenues were driven by the handover of land plots and 410 residential units and the sale of [offices at] the Al Noor office building at Al Raha Beach. The company recognised revenues from its development business of Dh1,217.8 million [Dh1.217 billion]. Recurring revenues from investment properties and operating businesses were up 12.9 per cent to Dh406.7 million in the first quarter,” Aldar said in a statement.

The company handed over 66,000 square metres of serviced land at Al Raha Beach during the quarter. The road links running between Al Zeina and HQ and between Al Raha Gardens and Al Raha Beach also opened during the quarter.

“Aldar has delivered most of its projects and not announced any major new project. Because there were less projects in the delivery phase, there was less revenue to book,” Mohammad Ali Yasin, managing director at NBAD Securities, told Gulf News, commenting on Aldar’s first quarter earnings.

“The drop in revenue also happened due to less land [sales]. The local housing projects have lower margins, as well as lower revenue contribution. On the positive side, Aldar’s debt dropped significantly, which is a good sign, going forward,” he added.

Aldar’s stock on the Abu Dhabi Securities Exchange fell 3.33 per cent yesterday, closing at Dh1.45. Aldar said its rental income from investment properties, which include Aldar’s office, residential and retail portfolio, was up 15 per cent on year in the first quarter to Dh172.9 million on the back of continued growth of occupancy levels in the office and community retail portfolios.

Revenues at Aldar’s operational businesses, such as operative villages, schools and hotels, also increased, generating Dh233.8 million. Overall debt levels reduced with the conversion from debt to equity of the Dh693 million mandatory convertible bond, helping reduce the company’s external financings by 7.5 per cent to Dh12,965.3 million, Aldar said.

“The company’s liquidity position remains very strong with Dh3.2 billion in unrestricted cash and Dh4 billion of undrawn and available liquidity from our revolving credit facility,” Aldar added.

As regards its proposed merger with Sorouh Real Estate, Aldar said the proposed merger will create a “stronger and more diversified company to take advantage of future opportunities in Abu Dhabi and other regional markets in the coming years.”

On the effective date of the merger, Sorouh shares will be delisted from the Abu Dhabi Securities Exchange and Sorouh will be dissolved as a legal entity, it added.

“Aldar will then be named AldarSorouh Properties PJSC. The integration planning is already underway and it is currently anticipated that the merger will become effective in June 2013,” the statement said.