Aldar doubles profits to Dh1.3bn after Abu Dhabi government boost

Abu Dhabi's largest listed property developer Aldar doubled its profits in 2012 as government sales helped boost the company's balance sheet.

Aldar said 2012 net profits rose by 109 per cent to Dh1.3 billion. Ryan Carter / Crown Prince Court - Abu Dhabi

Government sales helped Aldar drive net profits for the year up by 109 per cent to Dh1.3 billion (US$354 million).

The emirate's largest listed developer sold about 900 apartments at Al Raha Beach and generated further sales from building homes for the National Housing Programme.

Aldar agreed to sell some of its prized assets to the Abu Dhabi Government in 2011 after it was hit hard by the property downturn.

Aldar, which is currently in negotiations to merge with rival Sorouh Real Estate, reported that revenues for the year rose 69 per cent to Dh11.4 bn, while the company reduced its net debt by 17 per cent to Dh11.7bn.

Revenue from land sales, completed properties and project management rose 83 per cent last year to Dh9.9bn.

Aldar stock lost 4.2 per cent yesterday to close at Dh1.38.

"The results were in line with our expectations although the market seems to have reacted quite negatively to them," said Saleem Khokar, the head of equities at the National Bank of Abu Dhabi. "We're very comfortable with Aldar's growing government focus and that will only continue going forward after the merger with Sorouh with one entity supported fully by the government."

Aldar banked cash from handing over 1,882 pre-agreed apartment sales and 111 pieces of land at its Al Raha Beach scheme – half of which were to the government.

It also built 1,457 homes at its Al Falah scheme as part of the Government's National Housing Programme.

The developer added that it received Dh352.9m from selling 102 private homes last year – 38 of which were sold during the final three months of the year. In 2011 Aldar said it sold 1,930 houses and apartments.

"At the end of 2012 there remained Dh10.5bn of cash still to be received from the Government [as part of the 2011 asset sales] and we have already received Dh2.5bn this quarter," Aldar's chief financial officer Greg Fewersaid yesterday.

He said that the company made Dh200m in net profits from its National Housing Programme work alone and expected to make about the same amount from it this year.

Aldar announced it had signed an agreement to sell its 18,000 square metre Al Noor building at Al Raha Beach to a joint venture it has with Etihad Airways during the final quarter of last year. The building, which was completed last year, will be leased on a long-term basis to Etihad. The joint venture has also acquired 23,000 sq metres of office space that it will lease to Etihad on a long-term basis.

The developer also said it was progressing with work on its 233,000 sq metres Yas Mall on Yas Island, which is expected to open next year. Aldar said that 62 per cent of the scheme was either pre-leased or under heads of terms agreements. Most of the concrete pouring is now complete and the cinema complex is ready for fit-out.

Revenues from Aldar's remaining investment properties, hotels and schools businesses rose by 10 per cent to Dh1.4bn. The company said it had drawn Dh800m of its new Dh4bn revolving credit facility by the end of last year while net assets increased 15.3 per cent in value to Dh8.2bn.

Aldar reported that profits rose 31 per cent during the final three months of the year compared with the same period in 2011 to Dh238.9m, much of which it attributed to its recent organisational restructuring.

Nonetheless, revenue at the company in the three months to December fell to Dh1.6bn, a 23 per cent decline on the same period in 2011. Aldar said this was a result of government sales during the fourth quarter of 2011 boosting revenues for that period.

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