Aldar Properties reports 28% jump in Q4 net profit on higher revenue

The company is currently assessing opportunities to develop a mixed use project in Egypt

The Aldar HQ building in Abu Dhabi. Aldar reported a 28 per cent increase in its fourth-quarter net profit on the back of higher revenue. Delores Johnson / The National

Aldar Properties, the UAE’s biggest listed developer, reported a 28 per cent increase in its fourth-quarter net profit on the back of higher revenue.

Net profit for the three months to December 31, 2020, jumped to Dh729 million, the company said in a statement to the Abu Dhabi Securities Exchange, where its shares trade. Revenue grew 19 per cent to Dh2.53 billion.

“Aldar’s powerful performance in 2020 has set the tone for a new phase of sustainable growth,” Talal Al Dhiyebi, group chief executive of Aldar Properties, said.

“We have adopted a new operating model to propel the company to the next level in terms of scale and breadth of activity and to meet our ambitious sustainability targets. This will involve a major programme to accelerate the recycling of capital and to invest in expansion.”

Aldar Properties last month revamped its business and adopted a new operating model with a parent company overseeing its core development and investment businesses.

Aldar Development, which is responsible for building out the company's 75 million square metre land bank, will be headed by Jonathan Emery and will have three subsidiaries including Aldar Projects, Aldar Ventures and Aldar Egypt, it said last month.

Aldar Investment, headed by Jassem Busaibe, will be responsible for managing its Dh16bn portfolio of recurring income assets. Its subsidiaries include schools business Aldar Education, Aldar Hospitality and Leisure and a new Aldar Estates business.

For the full year, the company's net profit attributable to its owners fell 2 per cent to Dh1.93bn as direct costs as well as provisions, impairments and write-downs rose. Direct costs increased 23 per cent to Dh5.41bn while provisions, impairments and write-downs jumped 94 per cent to Dh295.7m. Revenue and rental income rose to Dh8.39bn in 2020 from Dh7.14bn in the previous year.

Aldar Development’s revenue during the fourth quarter rose 53 per cent to Dh1.59bn as property sales grew by 65 per cent to Dh1.6bn, driven by “robust demand” for projects at Saadiyat Island and Yas Island, the company said.

Aldar Investment’s total revenue fell 13 per cent to Dh936m in the fourth quarter, according to the company.

Development sales were stable year-on-year at Dh3.63bn, reflecting sustained investor confidence in Abu Dhabi’s real estate fundamentals, the company said. Its Waters Edge, Mamsha and Nareel Island developments all experienced strong demand, it added.

Aldar is also currently assessing opportunities to enter the Egyptian market through its dedicated new subsidiary that will focus on developing mixed-use communities in the Arab world's most populous country.

The property market in Abu Dhabi is expected to stabilise in 2021 amid balanced supply, according to a new report from consultancy ValuStrat.

“Rents and capital values in established villa locations could stabilise and perhaps witness gradual appreciation. Apartments could follow suite towards the end of 2021,” the report said.