We noticed you're blocking ads.

Keep supporting great journalism by turning off your ad blocker.

Questions about why you are seeing this? Contact us

Font Size

- Aa +

Sun 13 Jan 2008 09:57 AM

Font Size

- Aa +

Amlak posts record profit

Eight-fold rise in Q4 earnings to $35mn helps largest UAE mortgage lender beat full-year target.

Amlak Finance, the largest UAE mortgage firm by market value, beat forecasts with a record profit in its third quarter of growth since a management shakeup designed to stem a slide in earnings.

A more than eight-fold rise in fourth-quarter profit helped Amlak beat its full-year target, set after the board replaced the chief executive in May and the two worst quarters on record had turned the stock into Dubai's second worst performer.

"Amlak has gone from a collapse story to a growth story," said Wadah Al-Taha, head of strategy at Emaar Financial Services, who said he expected the stock to rise above 8 dirhams this year. Amlak shares closed on Wednesday at 5.51 dirhams.

Net profit grew 758% to 128.4 million dirhams ($35 million) in the fourth quarter and 131% to 301 million dirhams for the full year, Amlak said in a statement.

Forecasts for Amlak's fourth-quarter profit ranged from 69.43 million dirhams to 112.21 million dirhams, according to a Reuters survey last month.

The company, which complies with Islamic law, had set itself a goal of growing profit by 70% this year. In December it said full-year earnings would be at least 120% above the 2006 figure, firing a rally in Amlak's stock.

That announcement helped the stock turn the tables on smaller rival Tamweel. Tamweel's shares rose more than 65% last year compared with around 7% for Amlak's. In the past month, however, Amlak has climbed 18% and Tamweel has fallen more than 2%.

Amlak chairman Nasser Al-Shaikh attributed the return to earnings growth to a "clear focus of consolidating the company's core business by targeting real estate financing and investment", according to the statement.

Amlak has been shedding assets that do not directly relate to its mortgage business. In May it sold a 10% stake in Emaar Industries and Investment to Dubai-based Zabeel Investments.

Al-Shaikh said he could not immediately comment on the earnings. Chief executive Arif AlHamri, who joined Amlak from HSBC in May, could not be reached for comment.

The company increased revenue by 82% to 711 million dirhams in 2007, Amlak said in a statement, without giving a quarterly revenue figure. About 65% of revenues came from financing activity, Amlak said.

Annual earnings per share increased to 20 fils from 9 fils, it said.

Amlak is expanding outside the UAE, where banks, with their larger asset base and bigger branch networks, are muscling in on the rapidly expanding mortgage market.

The value of outstanding home loans from banks surged 86% to 42 billion dirhams in the year to March 31, according to central bank data.

Amlak has operations in Egypt, Jordan Saudi Arabia and Qatar, and said last month it was considering moving into Bahrain. (Reuters)

Arabian Business digital magazine: read the latest edition online

For all the latest market news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.