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Thu 15 Nov 2018 10:37 AM

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Aldar Properties' Q3 profits fall 30% amid higher costs

Aldar Properties CEO Talal Al Dhiyebi said he believes recent government initiatives will encourage long-term growth

Aldar Properties' Q3 profits fall 30% amid higher costs
Aldar Properties CEO Talal Al Dhiyebi said that government initiatives such as the AED 50 billion Ghadan 21 programme, changes to residency visa regulations and Adnoc’s AED 484 billion capital investment plans “will accelerate national development and support sustainable long-term growth.”

Aldar Properties net profits dropped 30 percent to AED 420 million ($ 114.35 million) in the third quarter of 2018, which the company attributes to higher costs and a number of one-off items, Aldar announced on Thursday.

In a statement, Aldar noted that revenues rose 8 percent to AED 1.5 billion ($408.39 million) over the quarter, while gross profits were steady at AED 581 million ($158.18 million). Profits in Q3 2017 were AED 601 million ($163.63 million).

“Our business is structured to deliver long-term growth,” said Aldar Properties CEO Talal Al Dhiyebi. “Today, more than two thirds of our gross profit comes from the stable, mature assets held in Aldar Investments delivering consistent returns throughout the cycle.”

The financial results said the decline in profit was attributed to increase interest costs because of the reduction of cash deposits and an increase in debt used for the acquisition of Tourism Development and Investment Company (TDIC) assets.

Al Dhiyebi added that the results are “complemented by a development business that is expected to deliver over 7,000 units between 2018 and 2021, providing a steady pipeline of contracted cash flows that will start contributing to Aldar’s 2018 dividend, in line with our stated dividend policy".

Looking to the future, Al Dhiyebi said that government initiatives such as the AED 50 billion Ghadan 21 programme, changes to residency visa regulations and Adnoc’s AED 484 billion capital investment plans “will accelerate national development and support sustainable long-term growth.”

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