Aldar Properties hit by Q4 profits slump

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ALDAR PROPERTIES: Profits hit as real estate market heads south. (Getty Images)

UAE's Aldar Properties has posted an 84.9 percent fall in fourth-quarter net profit to about 80 million dirhams, due to lower sales in poor market conditions, missing analysts' forecasts.

The company, one of UAE's largest developers, said in a statement that full-year profit rose 77.3 percent to 3.44 billion dirhams, compared with 1.94 billion dirhams in 2007.

"The lower fourth-quarter profit was driven by sales volume which was very low in the last quarter compared to the first three quarters," Shafqat Malik, chief financial officer of Aldar said.

"We intentionally took a decision not to sell in the fourth quarter because of market conditions. We are alert to the market conditions and as soon as we see an appropriate opportunity, we will look at doing sales," he said.

Analysts' forecasts ranged from 512 million dirhams to 896.1 million dirhams, according to a Reuters survey last month. The average forecast was for a 39.3-percent rise in profit.

Developments under construction rose 175.3 percent to 22.93 billion dirhams from 8.33 million dirhams at end-2007, the statement said.

Total financing at end-2008 stood at 22.59 billion dirhams, up from 10.51 billion dirhams a year earlier.

Aldar has 12.07 billion dirhams in cash and 10.93 billion dirhams in undrawn credit lines, the company said, saying this made it "well positioned to meet its financing needs in the coming year".

Aldar Properties earned 3.36 billion dirhams in the first nine months of 2008 and 528.3 million dirhams in the fourth quarter of 2007. (Reuters)

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READERS' COMMENTS

Yes, the game is over, let's talk sensible business now
Posted by Property Guru, Dubai, UAE on Sunday 1 February 2009 at 09:02 UAE time


I completely agree that the game is over. The game of making money double every month if not every day, probably. People who bought 2008, they are hardest hit not only in properties but stocks & oil (imagine someone bought at $147), more over they had no money and no intention to hold the underlying asset.

Anyone who is doing leverage business has to understand that when leverage goes reverse, money just washes out. In currency markets where 100 times leverage is possible, you can double your money or lose 100% within one hour.

But anyone who bought with the intention to use the property, paid 100% of it or arranged mortgage and has ability to repay it, where is the problem? At least it is better than having Lehman brothers or Satyam computers stock.

Yes, the GAME is over.

For Guru
Posted by ramy, ad, uae on Thursday 29 January 2009 at 19:51 UAE time


This is to reply to Guru, we should understand that the hot money left the country and more than $ 200 Billions left the country, where were the banking regulations?

The fatal mistake that the people dealt with the real estate market such stock market, my dear , never happened in any western country that bank finances off plan properties, never happened in any western countries that bank finances non resident buyer.

I agree with you that the real estate market will come back but not like before, it will be only a normal market calm and quite, the prices are higher than those in Paris or Canada.

I am not a buyer or seller of Real estate, but do not expect that any one bought properties in the second half of 2008 is going to make money in near future, the game is over take it from me.

It's actually a good time
Posted by Property Guru, Dubai, UAE on Thursday 29 January 2009 at 17:20 UAE time


Real estate activity is at stand still. Everyone is thinking "what went wrong" ? Where is the money? The good side is few years back expatriates could not think of buying property. Today, good or bad, there is a market. I am sure this no activity period will give time to every one for making introspection.

If we can collectively contribute to correct our mistakes, we can be back on track once again. This time, we don't need crazy price rise "EVERY HOUR". Steady returns will do.

There is no need to make only luxury homes. All category of homes / spaces are required and should be made.

No one had time or need to make an introspection. Now they have all the time in the world. It's actually a good time.

The game is over
Posted by رامى, AD, UAE on Thursday 29 January 2009 at 09:52 UAE time


Absolutely, all developers in UAE are facing a huge loss and the worst scenario is still coming , not cause of global financial crisis but also for the following reasons caused only in UAE :-

• Lack of regulation governed real estate market
• Real estate market built on flippers and not on end users.
• All buyers having intention to make quick money and do not have the real desire in real estate
• The type of construction and fantasy.
• Constructing towers are not matching with the real need
• Developers are speaking only to VVIP and ignored the low and middle class.
• Lack of banking regulation
• Lending money to any one and any time regardless his income and his visa status
• Banks are financing off plan homes

• So, whoever expects that the real estate market will bounce , I am sure he is dreaming or living in another planet.

The game is over

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