Monday, December 17, 2018 3:54 AM

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Aldar Properties’ H1 net profit declines 13% to Dh1.1 billion


Aldar Properties’ net profit declined 13 percent to Dh1.1 billion in the first half of 2018, compared to the first half of 2017, although its gross profit for the same period rose 5 percent to Dh1.4 billion, up from Dh1.3 billion in the first half of 2017.

The Abu Dhabi-based master property developer said, its first half year revenue grew marginally 2 percent to Dh3. billion compared to Dh2.9 billion recorded in the first half of 2017, driven by revenue recognition on developments under construction and recent asset acquisition.

During the first half of the year, Aldar announced and completed acquisition of Dh3.6 billion of assets from the Tourism Development Investment Co (TDIC).

The company’s gross profit margin of 46 percent is higher than 44 percent recorded in the corresponding period last year, supported by high margin development and land plot sales revenue

Its net operating income from asset management business increased 6 percent to Dh377 million. During this period, the developer completed handover of Ansam and Hadeel while handover commenced for Nareel Island, Al Merief and West Yas,

It also announced the Dh 10 billion masterplan community at Alghadeer at Cityscape Abu Dhabi in April. The company has recorded 77 percent of properties sold across entire development portfolio.

Talal Al Dhiyebi, Chief Executive Officer of Aldar Properties, said: “Aldar delivered a solid underlying performance for the first half of 2018 alongside a number of landmark announcements. In the development business, we launched a new masterplanned community Alghadeer and reinforced our reputation for delivery as we commenced handover of land plots and villas at Nareel Island, Al Merief and West Yas. 

“We have cemented our position as Abu Dhabi’s leading real estate investment company by completing one of the country’s largest ever real estate acquisitions. The transaction, completed in just 60 days after being announced, adds Dh3.6 billion of strategic operating and development assets to our existing portfolio, which continues to deliver a resilient and consistent performance, positioning us well for future growth.”

Development sales for the first half of the year were Dh1.1 billion (Q2 2018: 372 million), driven by sales of developments under construction, and two newly launched developments that build on Aldar’s destination strategy. Alghadeer, a new Dh10 billion, 14,408 unit masterplan that sits within Aldar’s Seih Al Sdeirah land bank on the border between Abu Dhabi and Dubai was launched at Cityscape Abu Dhabi in April 2018. Reflection, launched in March 2018, is a boutique residential development on Reem Island expanding Aldar’s portfolio of mid-income developments in a city location.  

Handover completed at Ansam and Hadeel, and commenced on West Yas (Aldar’s first villa community on Yas Island), Al Merief (a master planned community in Khalifa City) and Nareel Island (an exclusive master planned community near Al Bateen). All other developments under construction are progressing well, with Meera, located on Reem Island, on track for handover in the last quarter of 2018. 

In May 2018, Aldar announced the acquisition of a selection of assets from Tourism Development & Investment Company (TDIC). The assets purchased included residential projects on Saadiyat Island at reasonably advanced stages of construction. These high-quality projects expand Aldar’s pipeline of existing projects under development and contribute immediate revenue as construction progresses.

Aldar’s asset management portfolio of residential, retail, office and hospitality properties delivered another resilient performance, with a 6 percent increase in net operating income to Dh377 million during Q2 2018, compared with Dh357 million in Q2 2017. 

Occupancy remains healthy across the portfolio. Residential occupancy as at 30 June 2018, stood at 91 percent, while occupancy in the commercial portfolio was 91 percent and Yas Mall was steady at 89 percent. The hospitality portfolio recorded occupancy of 74 percent during the first six months of 2018.

Aldar’s acquisition of assets from TDIC included a portfolio of operating assets, predominantly comprising residential, hospitality and leisure and district cooling. The transaction was completed in the second quarter within 60 days of being announced. These assets are now firmly integrated into Aldar’s portfolio and will provide a more meaningful contribution during the second half of the year and beyond.