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29 March 2024

Aldar profit beats forecast

Published
By Reuters

Struggling Abu Dhabi property developer Aldar Properties reported a three-fold increase in net profit, buoyed by delivery of 1,058 high-end residential beach units, beating analyst forecasts.

Aldar, currently in merger talks with rival Sorouh Real Estate, made a second quarter net profit of Dh417.9 million ($113.8 million) compared with Dh127.3 million last year.

The results beat analyst average estimates of Dh40.35 million.

Revenue for the quarter was Dh4.6 billion compared with Dh775.7 million in the prior-year.

The builder of the Yas Marina Formula One Circuit, in which state fund Mubadala has a near-majority position, said revenue was boosted by the handover of 1,058 units on Al Raha beach in the quarter.

Aldar said it is yet to receive Dh12 billion for three main asset sale agreements with the government made between 2009 and 2011. This includes Dh3.6 billion of revenue relating to land sales at Al Raha Beach.

"These contracted sales provide the foundation for Aldar's strong ongoing revenue and cash flow visibility over the coming quarters," the statement said.

The indebted developer announced earlier this year that it may merge with Sorouh in a state-backed tie-up that could create a company worth about $15 billion in assets. Aldar said due diligence was under way but no further details were provided.

Abu Dhabi's property market is facing challenges as a huge supply of high-end homes are expected to enter the market this year. Property prices in the emirate are expected to fall another 5 percent in 2012, a Reuters poll showed.

It secured a Dh4 billion credit facility from National Bank of Abu Dhabi in April.