Aldar Properties, Abu Dhabi's largest developer, posted its second straight profitable quarter after a year of losses.
Aldar boosted by home handovers
Completion of homes in Abu Dhabi's Al Gurm, Al Bandar and Al Raha Gardens helped Aldar Properties, the emirate's largest developer, to post its second straight profitable quarter after a year of losses.
The developer of Ferrari World, Yas Island and Abu Dhabi's Central Market reported a net profit of Dh127.3 million (US$34.6m) in the second quarter compared with a loss of Dh475.3m in the same period a year ago. The company's preliminary statement showed a profit of Dh316.4m in the first half after reporting a loss of Dh789.5m last year.
Revenue increased 300 per cent in the first half to Dh1.56 billion, up from Dh427m in the same period last year. "The first half of 2011 has seen a continued focus on our core business, the prioritisation of current projects and cash flow management," said Ali Eid AlMheiri, Aldar Properties' chairman.
Sales of homes and land accounted for Dh821m in revenue in the first half, while recurring revenue from investments and on-going businesses more than doubled to Dh728.3m, up from Dh354.6m in the first half of last year. At the same time management cut general and administrative expenses by 35.3 per cent in the first half of this year.
"There was an obvious improvement in the operational aspects of the business," said Chet Riley, an analyst with Nomura Securities.
The consistent revenue from hotels, retail space and residential properties will play an increasingly important role as the company goes forward, Mr Riley said.
"This is going to be refocused as an asset management and operations company," Mr Riley said. "It's going down the maturity continuum."
The company also reported "further recognition of income related to the transfer of assets to the [Abu Dhabi] Government announced in January".
Under that transfer, the capital would buy Dh10.9bn of the company's infrastructure assets on Yas Island, Dh5.5bn of residential units and land, and issued a Dh2.8bn convertible bond to Mubadala Development, a strategic investment company owned by the Abu Dhabi Government.
Aldar ended the first half of the year with Dh5.5bn in cash and bank balances, the company said. It repaid borrowings of Dh2.69bn and raised additional financing of Dh4.28bn, including the bond issued to Mubadala.
Aldar returned to the black in the first quarter, posting a net profit of Dh189.1m compared with a Dh314.2.2m loss in the same quarter a year earlier. Aldar posted a Dh12.65bn loss last year, after writing down the value of assets.
Aldar continues to benefit from the delivery of its residential projects, primarily in the freehold area of Al Raha Beach. The company is expected to release 3,000 homes this year.
Last month the company started handing over units in the first phase of Al Zeina, a development with 952 apartments and 180 villas on Al Raha Beach.
Aldar also plans to hand over units in the nearby Al Muneera, a mixed-use development clustered around 14-storey apartment buildings, later this year.
The company also launched a new development for Emiratis in Al Bateen, including 272 apartments and 75 villas.
Aldar shares closed at Dh1.28 yesterday, up 1.5 per cent, before the report was released.