Aldar Q2 profit surges 168% to Dh506m

Aldar Properties today announced a net profit of Dh506 million for the second quarter of 2014, an increase of 168 per cent from Q2 2013 after adjusting for one time effects booked at the time of the merger with Sorouh.

Revenues for Q2 2014 totalled Dh2.194 billion, up 74 per cent from Q2 2013.

The net profit for the second quarter was primarily driven by the continued handovers of units at the Gate Towers and strong growth in residential leasing revenues on the back of a successful leasing campaign principally at the Al Rayyana development.

Mohammed Khalifa Al Mubarak, CEO of Aldar Properties, said: “We have seen another robust set of quarterly numbers reflecting focussed execution as we continue handing over high-quality units at the Gate and further reduced our cost of borrowing. The operational achievements during the quarter have been particularly impressive with sales and leasing activity at an all-time high, as our residential properties continue to benefit from a flight to quality.

“Looking ahead, we have made a strong start with the new development pipeline with project launches that have opened up the Abu Dhabi off-plan sales market. These launches will help to drive future earnings growth as we start to monetise our extensive land bank for the benefit of our shareholders.”

Recurring revenues in the second quarter totalled Dh526 million, an increase of 45 per cent from Q2 2013. This was driven by higher revenues across our Investment Property portfolio in particular faster than expected lease up at Al Rayyana development.

During Q2, Aldar made significant progress implementing its financing strategy by further lowering its borrowing costs, extending its maturity profile and lowering borrowing levels. Aldar has replaced Dh1.6 billion of existing bank loans with new loans that carry a lower cost and have longer maturities.

Aldar also repaid a $1.25 billion bond due May 2014 using internally generated cash and utilising Dh4 billion in undrawn bank facilities.

Since completing the merger last year, Aldar has reduced its gross debt from Dh14.2 billion to Dh10 billion, including a Dh1 billion reduction in gross debt this quarter, and continues to maintain a strong cash position of Dh3.9 billion of cash at the end of the quarter.

In April 2014, Aldar launched three major new residential developments in prime areas of Abu Dhabi, with a combined gross development value of approximately Dh5 billion.

Aldar’s Board of Directors also appointed Mohammed Khalifa Al Mubarak as Chief Executive Officer on 12th July 2014. Mohammed Khalifa Al Mubarak previously held the position of Deputy CEO and Chief Portfolio Management Officer at Aldar.

Operational update

Aldar said sale of B2 Tower, located in Marina Square on Reem Island, was signed during the quarter and subsequently completed. The tower comprises 202 completed units that are ready for handover across 44,424 sq m of sellable area.

The handover of units at Gate Towers is well-underway with the majority of the sold units now handed over.

The developer said the leasing of 1,537 units at Al Rayyana are fully let well ahead of schedule. The lease agreements have been signed with individual and corporate tenants from a range of sectors.

The leasing of retained residential units at the Gate is well underway and progressing well with more than 50 per cent now leased.

It said occupancy rates at the hotels on Abu Dhabi Island, Yas Island and the Tilal Liwa Hotel in the Western region of the emirate increased to 80 per cent in Q2 2014, up from 75 per cent in Q2 2013.

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