The ADX gained 1.18 per cent while DFM closed higher by 4.49 per cent this week.
The biggest individual gainers are Bank of Sharjah (19.72 per cent), Abu Dhabi National Insurance Company (12.39 per cent), Abu Dhabi Ship Building (12.21 per cent), Emaar Development (11.34 per cent), Aldar Properties (9.41 per cent), Emaar Malls (6.86 per cent) and Union Properties (5.32 per cent).
Aldar's announcement a few days ago that its residential community Noya on Yas Island was sold out in four hours on the first day of the launch buoyed property shares in general. Aldar's have risen 12 per cent since the beginning of the month, and a stunning 114 per cent from March lows.
The Aldar event, which generated over Dh1 billion in sales, was also notable for it’s customer diversity. Almost 40 per cent was sold to non-UAE nationals, which shows strong foreign interest. Even though, the sales were in Abu Dhabi, the news is positive for Dubai since it shows that UAE assets, especially premium ones, are on foreign buyers' radar.
Among listed entities, Aldar gave the best financial performance last quarter. The company with a market capitalization of Dh23 billion was the only listed UAE real estate entity to post a revenue - and profit - growth. Damac Properties had a 43 per cent revenue growth, but its bottom-line turned red.
Emaar Properties sales declined by 33 per cent, while Deeyar Development showed a sales slide of 21 per cent. Aldar on other hand had revenue growth of 30 per cent and profits rose 8 per cent on a year-on-year basis. The main driver of profits was the decline in finance costs, selling and marketing expenses as well as staff costs.
One healthy pipeline
The star performer was its development management business, which posted revenues of Dh1.29 billion and more than double the same period in the previous year. The growth was powered by strong sales of completed residential units, income from continued progress on delivery of projects under development, and income for managing Abu Dhabi Government projects.
The asset management business was also resilient with a net operating income of Dh383 million, just 3.5 per cent lower year-on-year. The company topped it up with a free cash flow of Dh98 million. A commendable feat given the circumstances.
Aldar’s debt stands at Dh8.45 billion and it has cash of Dh4.5 billion. The debt is quite manageable and liquidity scenario comfortable. The major advantage of the company is that it has two core businesses, encompassing an actively managed income-generating investment portfolio and a development business focused on creating premier destinations.
Together they provide strong cashflows as well as revenue and profit growth. Aldar with a dividend yield of 4.92 per cent is a good sailor in a rough sea.
- Vijay Valecha is Chief Investment Officer at Century Financial.