Aldar's Q2 profit slumps by 79%

Abu Dhabi developer Aldar Properties' second-quarter net profit slumped 79.7 percent as it made no land sales during the first half of the year.

The largest developer in the Gulf Arab emirate by market capitalisation made a second-quarter net profit of 251.4 million dirhams ($68.44 million), according to Reuters calculations.

The results fell short of an average analyst forecast of 283.5 million dirhams in a Reuters survey earlier this month.

"The decrease in second-quarter profit is because of the land sales component," Shafqat Malik, the firm's chief financial officer told Reuters. "There were no land sales this quarter and this year."

"Our expectation is of a more positive second half," he said when asked if land sales would resume.

"Aldar is in negotiations relating to the sale of land plots but the challenging market conditions have extended the negotiation period," the firm said in an earlier statement.

The company made a net profit of 1.14 billion dirhams in the first half of the year, compared with 2.6 billion dirhams a year earlier, the firm said in the statement, without giving quarterly data.

Reuters calculated the quarterly profit based on previous financial statements. Aldar Properties reported net profit attributable to shareholders of 1.24 billion dirhams in the second quarter of 2008 and 888.6 million dirhams in the first quarter of this year.

Gross revenue for the first six months reached 1.1 billion dirhams and developments under construction rose by 44.8 percent to 33.2 billion dirhams, Aldar said.

Malik attributed the 1.1 billion dirhams of revenues to property sales at its Al Raha Gardens project, including 100 million dirhams of rental and other income.

"Operationally and in terms of liquidity, they're fine," said Sana Kapadia, vice president of equity research at EFG-Hermes in Dubai.

Aldar said in May it will issue a $1.25 billion five-year bond.

Aldar's profit slump was in line with its rival Sorouh Real Estate, Abu Dhabi's second-largest property developer, which reported a 75.5 percent profit fall last week.

The property sector of the UAE capital, home to most of the country's oil, has been more resilient to the global economic downturn, while neighbouring Dubai has been hit harder.

Aldar's shares last traded 2.2 percent lower at 3.93 dirhams a share on the bourse on Tuesday. The earnings results were released after the close of trading. (Reuters)

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