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Thu 14 May 2015 10:04 AM

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Abu Dhabi's Aldar Q1 net profit rises 36% as is slashes costs by nearly half

Growth is despite the state-linked builder of the emirate's F1 circuit reporting a 19.7% drop in quarterly revenue

Abu Dhabi's Aldar Q1 net profit rises 36% as is slashes costs by nearly half

Abu Dhabi's
Aldar Properties reported a 36 percent rise in first-quarter net profit on
Thursday as costs fell and earnings from its rental business surged.

The
state-linked builder of Abu Dhabi's Formula One circuit made a profit of AED618
million ($168.3 million) in the three months to March 31, it said in a
bourse statement.

This compares
with a profit of AED453.4 million in the corresponding period of 2014. It
had reported higher profits in six of the preceding seven quarters.

SICO Bahrain forecast
Aldar would make a quarterly profit of AED509.2 million.

Aldar's
first-quarter revenue was AED1.38 billion, down from AED1.72 billion
a year earlier, but direct costs dropped by a bigger margin - to AED737.5 million from AED1.37 billion in the prior-year period.

As well as
building and selling property, Aldar also leases residential, retail and office
units and has a portfolio of 2,500 hotel rooms, defining these as sources of
recurring revenue.

Quarterly gross
profit from this recurring revenue jumped 61 percent year-on-year to AED368
million, a rise Aldar said was a main driver of its net profit
increase.

The company
booked property sales and reservations of AED1.2 billion in the first
quarter, while its quarterly gross profit margin was 47 percent, up from 20
percent in the prior-year period.

Aldar said it
reduced its gross debt to AED8.2 billion from AED9.2 billion at
2014-end after Abu Dhabi's government made a scheduled payment to the company.
This helped cut Aldar's net debt-to-equity ratio to 16 percent from 25 percent
at the end of last year.

State-owned
fund Mubadala Development Co owns 30 percent of Aldar, Thomson Reuters data
shows.

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