By Jason Benham
UPDATE 1: Dubai Islamic mortgage firm sees second quarter net income increase 74% to $38.7mn.
Dubai Islamic mortgage company Amlak Finance posted a 74 percent surge in second-quarter net profit as half-year income jumped on a residential real estate boom.
Amlak, which offers home loans that comply with Islam's ban on the payment or receipt of interest, made 142.26 million dirhams ($38.71 million) in the three months to June 30, Reuters calculated based on half-year results released by the firm.
Revenues jumped 114 percent in the six-month period to 620 million dirhams - 52 percent of which came from property financing, Amlak said in a statement, without giving details.
Profit at Amlak more than doubled last year to 301 million dihrams, helped by the sale of investments.
The firm said it had a total portfolio of real estate investments worth 6 billion dirhams at the end of June.
Amlak made 269 million dirhams in the six months ended June 30, compared with 106 million dirhams in the year-earlier period.
Its second-quarter profit after depositors' share was 81.85 million dirhams in the second quarter of 2007 and 126.74 million dirhams in the first quarter of this year.
Amlak Chairman Nasser Al-Shaikh said in February he expected the mortgage firm to post profit growth of 70 percent this year spurred by higher UAE residential demand and investments sales.
The company, which is part-owned by Dubai-based Emaar Properties, planned to expand in Jordan, Qatar and Bahrain before July, Al-Shaikh said in February.
The firm said it had concluded an initial public offering of Amlak Finance Jordan, while raising the capital of its Egyptian operation to 125 million Egyptian pounds ($23.44 million) from 50 million pounds.
Shares of Amlak fell 1.74 percent to 4.52 dirhams on Sunday. The results were released after the close of trading. Shuaa Capital last week raised its fair value target on Amlak to 4.86 dirhams. (Reuters)
It is just so surprising to see such a company do profits and I truly wonder how real these profits are. Such a company that basis all its business on the initial processing fees and does not even bother to follow up with clients or even with the developer. The Discovery Gardens project that has been sold to clients is not even received. The company has not collected any of the due installments except for the Downpayment and processing fees. I wonder how long it would last....