Dubai-based mortgage lenderAmlak Finance on Monday recorded more than 50 per cent slump in 2017 full-year net profit after revenues declined for Sharia-compliant home financier amid a softer property market.
The lender reported full-year net income of Dh51.33 million for the 12-month period to December end, down from Dh107.04m reported year-earlier, the company said in a statement to Dubai Financial Market, where its shares are traded.
The net operating profit decreased to Dh176.1m at the end of last year from Dh234.44m for 2016. Total revenues dropped to Dh432.45m from Dh778.19m for the same period, the company said without explaining why its profits and revenues have decline. The earning per share also more than halved for to Dh0.027 from Dh0.071.
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The property market in the Dubai, the home-base for Amlak, has generally recovered well from the 2008 real estate crash which saw sale prices more than halve in some areas of the emirate, although it has faced headwinds in the past two years as the slump in oil prices slowed down the economy, leading to job losses and lower housing allowances amid an increase in supply.
During 2017, residential property rents declined at a more pronounced rate than sales prices, resulting in yield compression in most communities, according to Cavendish Maxwell’s 2017 Year in Review report, which is based on figures from its Property Monitor real estate database. The 12-month decline in residential rents across Dubai averaged 4 per cent as of December 2017, compared to a 2 per cent average decline in residential sales prices.
Amlak in January reported completion of construction of its first residential development in the UAE, a move aimed at creating recurring revenue lines. The Dh138m development in Dubai’s Mirdiff community, which spans over a 180,085 square feet area, comprises 54 villas that include four- to five-bedroom units.
The company, which also did not provide the fourth-quarter earnings details, in November said its third-quarter profit more than doubled after a reversal of impairment on Islamic financing and investment assets. Net income came in at Dh11.8m in the three months ended September 30, up from Dh5.67m in the same period last year, it said in a bourse filing at the time.
