Abu Dhabi: Aldar Properties, the Abu Dhabi-based real estate developer, announced a new dividend policy on Wednesday, which it will start implementing for the 2016 dividends.
“The dividend policy is based on the underlying cash flow performance of business. The policy will have two components, a 65-80 per cent payout range of the distributable free cash flow of 100 per cent owned investment properties and operating businesses; and a discretionary payout of cash profits on completion of newly launched off-plan developments,” said Greg Fewer, Aldar’s chief financial officer in a note.
The company did not elaborate on how the new policy differs from its existing one, but said it could lead to higher payouts for shareholders.
The company expects to be able to maintain its financial growth this year despite a more challenging macroeconomic environment on the back of lower oil prices.
“The nice thing about our business model now is that we have much more recurring revenue, which is much more visible. Our recurring revenues are producing very strong profits, and we’ll see those continuing for 2016,” Fewer said.
Earlier this year, the company reported Dh2.56 billion in net profit for 2015, marking a 13 per cent increase over the Dh2.27 billion in 2014.
The double-digit growth represents strong performance from Aldar at a time when the economic slowdown is adding pressure on companies’ financial performance and outlook.
Meanwhile, debt stood at Dh6 billion at the end of 2015 — down from Dh9.1 billion at the end of 2014 — with the company planning to continue reducing its debts.
Asked whether Aldar was planning to tap the bond or loan markets to raise capital, Fewer said that the company was monitoring markets, and that it was keeping all options open.
The CFO was speaking on the sidelines of Aldar’s annual general meeting on Wednesday during which the company approved the proposed cash dividend of 10 fils per share — up from 9 fils per share in 2014.
During the meeting, Aldar also announced a new dividend policy, which it will start implementing for the 2016 dividends.
“The dividend policy is based on the underlying cash flow performance of business. The policy will have two components, a 65-80 per cent payout range of the distributable free cash flow of 100 per cent owned investment properties and operating businesses; and a discretionary payout of cash profits on completion of newly launched off-plan developments,” Fewer said in a note.
The company did not elaborate on how the new policy differs from its existing one, but said it could lead to higher payouts for shareholders.
