Islamic mortgage lender reports 77% slump in first quarter profit; makes just over $1m
Dubai-based Islamic mortgage lender Amlak Finance recorded a 77 percent plunge in first-quarter profit because of amortisation charges, the company reported on Thursday.
Amlak, which has said previously that it aims to resume trading of its shares on the Dubai bourse this month after years of restructuring, reported that net profit fell to 3.7 million dirhams ($1.01 million) from 16 million dirhams in the same period last year.
The company "recorded an amortisation or unwinding of an initial fair value gain recognised on investment deposits at the time of restructuring" for an amount of 28 million dirhams in the first quarter, it said.
The total fair value gain was 911 million dirhams and this will now be amortised over 12 years, according to Amlak's financial statement. The company took a charge of 25 million dirhams for this purpose in the fourth quarter of last year.
Its shares have been suspended since November 2008, when the global financial crisis triggered a local real estate crash. Shareholders on April 16 voted to resume trading of the shares on the Dubai Financial Market and a request was sent to the stock market regulator.