Aldar looks ahead

Abu Dhabi_Beating analyst expectations, Aldar incurred a net loss of Dh789.5 million for the first half of the year compared to a net profit of Dh1.14 billion for the same period last year. However, the developer is more bullish about the second half, pinning hopes on the revenue generated from project handover.

"With the impact of the global economic situation, this has been a very challenging first half of the year for the entire sector. Throughout this period, we have taken all appropriate action to ensure the business returns to recurrent value creation," says Ahmad Al Sayegh, chairman of Aldar Properties.

The company made Dh695 million worth of sales during the first six months of this year, which will be recognised in future periods.

"Aldar's financial performance for the first half was disappointing due to lower-than-expected revenue on back of fewer deliveries, higher expenses because of provision for doubtful debts and pre-operating costs related to the Ferrari theme park," explains Rakesh Kumar Agarwal, research analyst, Abu Dhabi Commercial Bank.

The second half of 2010 holds promise for Aldar as its key projects will be delivered: Souk at Central Market, Al Bandar residential development, the arrival of long leasehold tenants into HQ within Al Raha Beach and the opening of Ferrari World Abu Dhabi on Yas Island. "Also, involvement in affordable housing projects will generate project management fees for Aldar and will boost the company's profit without any working capital commitments," Rakesh adds.

dnair@alnisrmedia.com