Abu Dhabi real estate developer says underlying revenue excluding one off gain rises 27%
Aldar's Q3 net profit declines 20% year-on-year due to one off-off land sales last year
Aldar Properties, Abu Dhabi's biggest publicly-traded real estate developer, said its third quarter profit fell 20 per cent, as gains from property sales made in the same quarter last year were not repeated.
Net profit attributable to equity owners of the company fell to Dh597.8 million in the three months ended September 30 compared to Dh747.8m in the same period last year. Revenue fell 27 per cent to Dh1.38 billion in the quarter from Dh1.89bn.
Excluding those one-off gains made in the third quarter of 2016, the company saw a 27 per cent gain in year-on-year revenue growth during the quarter. The company also had Dh604 million in development sales in the period, which included the complete sale of the first phase of homes at the company's new residential project Water's Edge on Abu Dhabi's Yas Island.
"Aldar has delivered another solid set of results," said Mohamed Al Mubarak, chairman of Aldar Properties.
"The exceptional response to our new development, Water's Edge, launched at Cityscape Global, cements our reputation for delivering desirable destinations in Abu Dhabi. Aldar continues to assess the market for other attractive acquisition opportunities in line with our commitment to drive growth of long-term recurring revenues."
The Egyptian investment bank EFG-Hermes said that the real estate developer's net profit didn't meet its expectation, coming in 5.1 per cent below its forecast, while revenue came in 1.4 per cent below its prediction.
"Contracted sales for the quarter came in at Dh604m, in line with our estimates; sales were dominated by unit sales in the Water's Edge community (West Yas) and sale of a land plot," said Mai Attia, an analyst the Egyptian investment bank EFG-Hermes.
"Occupancy rates for the residential portfolio rose for the first time since the first quarter of 2016, after stabilizing last quarter, while occupancy for the office and retail portfolio were stable. Revenue and gross profit figures from the investment portfolio were almost flat year-on-year, which we view positively, given the soft conditions in the Emirate's rental market."
Average residential rents in Abu Dhabi dropped 11 per cent year-on-year in the third quarter of 2017 because of challenging economic conditions, according to figures from real estate broker CBRE released last month.
Aldar has said that it is planning to launch at least one large affordable housing scheme next year, as it continues to build its portfolio of offerings to middle-income investors and end-users, banking on revived demand for mid-market properties.