Abu Dhabi property developer makes $113.8m net income in the second quarter of 2012
Struggling Abu Dhabi property developer Aldar Properties reported a three-fold increase in net profit, buoyed by delivery of 1,058 high-end residential beach units, beating analyst forecasts.
Aldar, currently in merger talks with rival Sorouh Real Estate, made a second quarter net profit of AED417.9m ($113.8m) compared with AED127.3m last year.
The results beat analyst average estimates of AED40.35m.
Revenue for the quarter was AED4.6bn compared with AED775.7m in the prior-year.
The builder of the Yas Marina Formula One Circuit, in which state fund Mubadala has a near-majority position, said revenue was boosted by the handover of 1,058 units on Al Raha beach in the quarter.
Land on Al Raha beach, along with the Ferrari World Theme Park and other key assets, was sold to the government last year as Aldar struggled to manage its liquidity needs. The government handed a rescue fund of $10bn in return, equivalent to the amount Abu Dhabi deployed to rescue Dubai from a bond default in 2009.
Aldar said it is yet to receive AED12bn for three main asset sale agreements with the government made between 2009 and 2011. This includes AED3.6bn of revenue relating to land sales at Al Raha Beach.
"These contracted sales provide the foundation for Aldar's strong ongoing revenue and cash flow visibility over the coming quarters," the statement said.
The indebted developer announced earlier this year that it may merge with Sorouh in a state-backed tie-up that could create a company worth about $15bn in assets. Aldar said due diligence was under way but no further details were provided.
Abu Dhabi's property market is facing challenges as a huge supply of high-end homes are expected to enter the market this year. Property prices in the emirate are expected to fall another 5 percent in 2012, a Reuters poll showed.
It secured a AED4bn credit facility from National Bank of Abu Dhabi in April.
Shares of Aldar ended 0.8 percent on the Dubai bourse before the announcement of the earnings. The stock has climbed 32.6 percent this year.