Aldar profit jumped by more than a third in the first quarter as the developer benefited from a surge in rents from its flagship Yas Mall shopping centre and lucrative land plot sales.
Abu Dhabi’s largest listed developer said profits rose 36.4 per cent to Dh618 million for the first three months of 2015 from Dh453m a year earlier.
Aldar said that profit from recurring revenue assets including Yas Mall, as well as the company’s 4,800-unit residential portfolio, grew 61 per cent to Dh368m.
At the same time Aldar said that sales of two land plots in the Shams area of Reem Island and one in Khalifa City had generated another Dh125m of gross profit. They will be built out as low-rise residential buildings with ground floor retail, the developer said.
Still, overall revenues fell by almost a fifth. The company said the decline reflected a high level of property handovers recorded on its The Gate project a year ago.
With few new housing developments completing, Aldar said that revenue from the development business halved to Dh580m from Dh1.1 billion but that gross profit rose 137 per cent to Dh282m.
Advances from customers also fell slightly by 0.8 per cent to Dh411.9m.
“This time last year we had just started a big wave of handovers at The Gate. Now we’re almost 100 per cent done, but the quality of the earnings we are attributing are significantly higher,” the Aldar chief financial officer Greg Fewer said.
“This is our first 90-day trading period with Yas Mall and it’s really starting to demonstrate the earnings power of our recurring revenues asset base,” Mr Fewer added. “In 2015 we’re going to be showing you a full recurring revenue asset base in place and let versus 2014 numbers, which didn’t quite have that revenue base. And you’re starting to see comparatively speaking the earnings power of that recurring revenues asset base – it’s large and its very significant and high margin.”
Aldar added that it repaid D1bn of loans in January, reducing the company’s gross debt to Dh8.2bn, down from Dh9.2bn at the end of December. Aldar said that its overall refinancing over the past year had led to a 59 per cent reduction in interest payments.
The company also disclosed that it was in arbitration with one if its contractors relating to a Dh300m claim for “an extension of time and works performed and not paid”. The company declined to give further details of the claim.
Aldar stock edged 0.36 per cent higher yesterday.
“By and large this is a positive set of results from Aldar,” said Harshjit Oza, an analyst at Naeem Brokerage. “I think overall Aldar has done well in 1Q15, particularly in their investment property portfolio. The share price has not reacted as the broader market has remained weak on disappointing results from construction sector companies.”
lbarnard@thenational.ae
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