Islamic home financier reports gains despite tough conditions
Amlak posts 5% profit gain in Q1 on revenues
Amlak Finance, the Sharia-compliant real-estate financier, posted a 5 per cent increase in net profit in the first quarter as revenues rose despite challenging market conditions.
Net profit attributable to equity holders rose to Dh5.9 million in the first three months of the year compared to Dh5.6m in the same period the previous year, it said in a statement on Monday. Total revenue increased 5 per cent to Dh104m in the first quarter versus Dh99m in the same period last year.
“Despite the market pressures in the local and regional real estate sector, we continue to focus on our core business development, differentiating our products and services, and driving profitability and value for our shareholders,” said Arif Alharmi, managing director and chief executive officer of Amlak.
“We also remain committed to our products and services and driving profitability and value for our shareholders. We also remain committed to our strategy and efforts to develop the infrastructure and sale of various land plots which we believe will have positive impact on the overall revenue and profitability of the company.”
The company’s increase in revenues was mainly due to a Dh24m gain in the fair value on investment in properties in the first quarter. Revenue from financing business activities fell 10 per cent to Dh42m in the first quarter compared to Dh47m in the same period last year. Amlak said the drop was chiefly due to a higher transfer of properties under development to customers in the first quarter.
Meanwhile, rental income increased 3 per cent in the first quarter to Dh15.4m versus Dh14.9m in the same period last year. Other income decreased 8 per cent in the first quarter to Dh9m versus Dh9.7m in the corresponding period last year.
During the quarter, the company booked a Dh2m impairment charge compared to an impairment reversal of Dh6m in the first quarter last year.
The company’s assets stood at Dh6bn in the first quarter, a 10 per cent decrease from the end of 2017. In the first quarter the company also made more advanced payments to financiers, this time to the tune of Dh684m.
Looking forward Mr Alharmi said there was reason for optimism given the increasing signs of economic growth.
“We are certain that Amlak is well-positioned to capitalise on the improving economic backdrop in the UAE and I look forward to seizing those opportunities,” he said.