Aldar swings back to profit

Abu Dhabi-based real estate developer Aldar Properties announced yesterday that it made net profits of Dh642.5 million in 2011, compared with a net loss of Dh12.66bn in 2010.

In a statement to the bourse where it is listed, the company has informed the Abu Dhabi Exchange that it has proposed the distribution of a cash dividend of 5 fils per share, subject to shareholder approval at its AGM on March 22, 2012.

Aldar’s bottomline was boosted by other income (Dh4.01bn in 2011 compared with expenses of Dh11.8m in 2010), which refers to profits on assets held for sale, government grant income and share of profit/loss from associates and joint ventures and impairment of available for sale invetments.

The property major’s revenues surged from Dh1.79bn in 2010 to Dh6.74bn in 2011, a jump of more than 276 per cent. Simultaneously, its direct costs grew over 239 per cent, from Dh1.5bn in 2010 to Dh5.09bn in 2011.

“In 2011, real estate market conditions remained challenging, however, we have delivered some significant milestones and have emerged in 2012 as a financially stronger company in a better position to meet our objectives going forward,” the company said in its consolidated financial statement.

“The Company recognised Dh5.4bn (2010: Dh905.4m) from the sale of land plots and completed residential units and project management fees,” it said in a media statement. “The increase was primarily due to revenue from land sales to the government supplemented by increased sales of residential units.”

Aldar said it had written down the value of certain assets in line with prevailing market values. “Accordingly, appropriate impairments, provisions and fair value losses of Dh3.0bn were recognised during the year,” it said. The comparative impairments figure for 2010 stood at Dh11.3bn, signifying a decline in impairment charges of 73 per cent year-on-year.

Last year, Aldar received Dh36.3bn in cash from two financial transactions with the Government of Abu Dhabi and its investment arm Mubadala Development Company. “The first transaction was completed in January 2011 for Dh19.4bn including sale of assets worth Dh16.5bn to the Government of Abu Dhabi and issuance of convertible bonds for Dh2.8bn to Mubadala Development Company,” Aldar said in its financial statement.

“The second transaction was completed in December 2011 for Dh16.8bn including sale of assets worth Dh9.2bn, transfer of infrastructure worth Dh5bn and a construction management agreement worth Dh2.6bn,” it added.

“These transactions were designed to create a solid financial foundation needed to drive returns to shareholders,” said the statement, which was signed by Aldar CFO Greg Fewer. “Moreover, we have realigned our organizational structure, reduced headcount and refined our business processes.”

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