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Tue 7 Aug 2018 12:45 PM

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Aldar reports drop in Q2 profit following increased costs

Chief financial officer Greg Fewer said Aldar is 'excited' about the stimulus from the government which will help drive market sentiment

Aldar reports drop in Q2 profit following increased costs

Abu Dhabi-based Aldar Properties has reported a 28 percent year-on-year decrease in second quarter profit, which it said was partly due to a revaluation of properties in the company’s retail portfolio.

“We are seeing some headwinds; in the retail portfolio, we renewed leases and updated book values,” chief financial officer Greg Fewer told media on a call on Tuesday.

In a regulatory filing to the Abu Dhabi Securities Exchange, the company reported a net profit attributable to shareholders of AED 445 million for the period ending on June 30.

In a phone call with journalists on Tuesday, Fewer said, "Aldar handed over an exceptionally high amount of infrastructure assets to the government [in Q2], which also contributed this year, but just not at the same level as last year."

In its statement of results released on Tuesday, the company said that net profit reached AED 1.1 billion ($299.46 million) in the first half of 2018 and AED 445 million ($121.14 million) in Q2, the company said on Tuesday.

Aldar's H1 2018 revenue was up 2 percent to AED 3 billion ($816.73 million), the company said. 

“Aldar delivered a solid underlying performance for the first half of 2018 alongside a number of landmark announcements,” said Talal Al Dhiyebi, CEO of Aldar Properties.

“In the development business, we launched a new master-planned community Alghadeer and reinforced our reputation for delivery as we commenced handover of land plots and villas at Nareel Island, Al Merief and West Yas.”

Al Dhiyebi added that the company cemented its position with the acquisition of prime real estate assets from Abu Dhabi’s Tourism Development and Investment Company (TDIC).

“The transactions, completed in just 60 days after being announced, adds AED 3.6 billion ($1 billion) of strategic and development assets to our existing portfolio,” he said.

According to Aldar, development sales for H1 2018 totalled AED 1.1 billion ($299.46 million), with AED 372 million ($101.28 million) in Q2, while its asset management portfolio delivered a 6 percent increase in net operating income to AED 377 million ($102.64 million) in Q2, compared to AED 357 million ($97.19 million) in Q2 2017.

The company noted that occupancy remained healthy across its portfolio, with residential occupancy standing at 91 percent as of June 30, while occupancy in the commercial portfolio was 91 percent and Yas Mall at 89 percent. The hospitality portfolio recorded occupancy levels of 74 percent in H1 2018.

Looking to the future, Fewer said the company was  confident that conditions would improve in the third quarter, following a $13.6 billion economic stimulus package announced by Abu Dhabi in June.

“We are excited about the stimulus from the government, there are programmes coming in the third quarter…so a very solid market backdrop to drive sentiment,” Reuters quoted him as saying.

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