Property financing company Amlak Finance reported a net profit of Dh1.06 billion for the year 2021. Image Credit: Shutterstock

Dubai: Amlak Finance reported a net profit of Dh1.06 billion for the year 2021 as compared to net loss of Dh438 million for the year 2020.

Amlak’s income for the year 2021 increased by 215 per cent to Dh1.29 billion as compared to Dh412 million during last year excluding fair value losses on investment properties. Increase in income is mainly related to the settlement of the arbitration and the gain resulted from the debt settlement arrangements. Revenues from financing business activities for the year 2021 are marginally lower by 2 per cent as compared to 2020 and stand at Dh165 million in 2021.

Debt settlement

The company successfully concluded the settlement of the arbitration ruling in Amlak’s favour with a net value of approximately Dh875 million including both plots and partial cash instalments to be paid over 24 months.

The company’s debt settlement arrangements, through cash and real estate assets swap, remained successful during the year, and enabled four financiers to fully settle and two financiers to partly settle their exposure during the year ended 31 December 2021.

“In 2021, our debt management initiatives resulted in full settlement of four financiers and gaining AED 465 million. Further, our teams worked closely in concluding successfully the long-running arbitration case in favor of Amlak Finance,” said Arif Albastaki, CEO of Amlak Finance.

Amlak recorded a gain of Dh465 million on debt settlement arrangements and was able to reduce its debt burden by Dh1.13 billion (including Mudaraba instrument of AED 235 million)

As a result of debt settlement arrangements and repayments, the profit distribution to financiers decreased by 12 per cent and stood at Dh87 million for 2021 as compared to Dh99 million for 2020.