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Aldar profit up 10% on lower impairments

By Reuters

Abu Dhabi's Aldar Properties posted a 9.8 percent increase in fourth-quarter net profit as it booked lower impairments on its property portfolio.

Abu Dhabi's largest developer by market value, which approved a merger with Sorouh Real Estate in January, made a fourth-quarter net profit of Dh200 million ($54.5 million) compared with Dh182.1 million last year, Reuters calculations show.

The company did not provide quarterly figures. Reuters calculated the net profit figure from previous financial statement.

The quarterly earnings missed estimates by analysts at Arqaam Capital and SICO Bahrain who had expected a profit of Dh323 million and Dh572.5 million respectively in a Reuters poll.

The merger between Aldar and Sorouh was seen as a measure to boost the Abu Dhabi’s property sector where prices have dropped over 50 percent since its peak in 2008.

Net profit for 2012 was Dh1.3 billion, doubling from Dh642.5 million posted in the prior year period, Aldar said in a statement on the Abu Dhabi bourse.

Revenue for the year also nearly doubled to Dh11.4 billion from Dh6.7 billion a year ago.

The company said it had adjusted the value of its certain assets to reflect current market conditions and reassessed recoverable amounts. It thereby booked Dh1.1 billion on provisions for impairments, write offs and fair value loss on investment properties in 2012, much lesser than the Dh3 billion booked in 2011.

Shareholders of Aldar will vote on the proposed merger of the property firms on February 21. Under the merger proposal, Sorouh shareholders will get 1.288 Aldar shares for every share they own.

Another 15,000 units are expected to enter Abu Dhabi's already oversupplied real estate market this year, property consultancy CBRE has said.