Amlak Q1 profit surges more than 5-fold



Dubai-based Islamic mortgage company Amlak Finance said first quarter profit rose more than five-fold to Dh126 million. Revenue almost tripled.

 

Revenue in the three months to March 31 was Dh270 million, compared with Dh102 million in the year-earlier period, the lender said in a statement, its second biggest quarterly profit ever.

 

Net income in the year-earlier period was Dh23.8 million, according to Reuters data.

 

Amlak Chairman Nasser Al Shaikh told Reuters in February he expected profit this year to rise 70 per cent, the same as last year's target, spurred by higher UAE residential demand and investments sales.

 

Profit at Amlak, the UAE's first mortgage company, more than doubled last year to Dh301 million, helped by the sale of investments in listed companies, Shaikh said.

 

Amlak generated 15 per cent of its profit last year from the sale of investments. It still has a stake in Dubai Aerospace Enterprise.

 

Share of Amlak are down 14.2 per cent to Thursday's close, twice that for the Dubai's main stock index, which was down 7.9 per cent. The stock rose 0.44 per cent on Sunday, before Amlak released its results.

 

Goldman Sachs last month raised its price target on Dubai-based Amlak Finance and rival Tamweel, saying the stocks were oversold.

 

The brokerage, which raised its price target on Amlak shares to Dh5.10 from Dh4.80, said the company has started improving performance and returns by refocusing on the core business. It retained a "neutral" rating on the stock.

 

Goldman raised its price target on Tamweel to Dh9.30 from Dh8.50, saying positive operational and financial momentum should reverse the moderately downward trend seen since mid-December. It kept a "buy" rating on the stock.

 

Amlak operations in Egypt and Saudi Arabia, both of which started last year, will contribute to revenue this year, he said, as Amlak expands abroad to reduce its reliance on its home market where competition is growing.

 

The company, which is part owned by Dubai-based Emaar Properties, plans to expand into Jordan, Qatar and Bahrain before July.

 

In Jordan, it plans to sell about 30 per cent of a $70 million (Dh257m) company in an initial public offering in the second quarter, later than expected following a request from the Jordanian financial authorities.

 

Partners include Jordan's Social Security Investment Unit and Jordan Dubai Capital, Shaikh said.

 

In Qatar, Amlak is planning a venture with the local Barwa Real Estate and in Bahrain it will own all its operations, Shaikh said. (Reuters)

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