Aldar posts rise in revenue for 2018 and increases dividend

Revenues up 2% on asset acquisitions and development sales

Aldar's HQ in Abu Dhabi. Sammy Dallal / The National

Aldar Properties, the Abu Dhabi real estate developer, posted a 2 per cent revenue rise for full-year 2018, attributed to higher returns from revenue raising assets and new acquisitions.

Net profit attributable to equity holders slipped 5 per cent year-on-year to Dh1.8 billion in 2018, while revenues rose to Dh6.3bn, boosted by Dh2.6bn of development sales, the company said in a filing to Abu Dhabi stock exchange, where its shares are traded, on Wednesday.

The net profit decline was partly due to a Dh700m adjustment for non-cash items, said chief financial officer Greg Fewer.

The board recommended a 14 fils dividend to shareholders on Wednesday, amounting to Dh1.1bn and representing a 17 per cent year-on-year increase over 2017.

The dividend reflects “the quality of Aldar’s recurring revenue assets that contributed the majority of the dividend, with growth supported by development handovers and collection of final payments”, Aldar said.

“2018 was a transformational year for Aldar with a series of game-changing corporate actions,” said Talal Al Dhiyebi, chief executive of Aldar Properties. “Our financial and operational performance was strong and will accelerate further as our mature asset portfolio grows and more of our developments enter the handover phase.

“With a positive shift in sentiment, strong liquidity in Abu Dhabi and the long-term health of our real estate market, we are optimistic about the year ahead.”

The company anticipates improved performance in 2019, which will be the first full year in which revenues from the Dh3.7bn asset portfolio that Aldar acquired from Abu Dhabi’s Tourism Development & Investment Company (TDIC) last May will be included in the balance sheet, Mr Fewer added.

Meanwhile, demand for UAE real estate will be boosted by government initiatives such as Abu Dhabi’s Dh50bn economic stimulus set to be rolled out this year and the introduction of longer-term visas for certain expatriates – both of which are shaping positive sentiment among investors, tourists and residents.

Aldar grew its portfolio by 9 per cent in 2019 through acquisition of new assets, according to the filing, while 78 per cent of all projects under development were sold by the end of 2018.

In the third quarter, Aldar established a Dh20bn property investment unit, Aldar Investments, that will hold recurring revenue assets to create a more efficient operating platform for Aldar. This is expected to further boost performance in 2019.

There are no plans to raise more financing following the issuance of Aldar’s $500m sukuk and an extension of its existing debt facilities last year.

“Our business plan is fully funded for 2019 and beyond and we have Dh4.7bn of undrawn credit lines,” Mr Fewer said. Aldar’s profit margin hovers at a “healthy” 35 to 40 per cent.

This year, the company will focus on bringing to market the two projects it plans to develop under its joint venture with Dubai’s Emaar Properties announced last year. Aldar continues to scout for acquisitions of industrial real estate, but has yet to identify the right opportunities, Mr Al Dhiyebi said.

The company is also drawing up designs for two land plot projects and intends to bring at least one of these schemes to market “well before the summer”.

Last month, Aldar reported Dh1.6bn of sales at its Alreeman project, a 2.8 million square-metre development featuring residential and commercial land plots. “We continue to consider this a very attractive market segment,” Mr Al Dhiyebi added.