Aldar shares fall as second quarter profits rise 168%

Aldar Properties shares fell 3.18 per cent to Dh3.65 on the Abu Dhabi Securities Exchange (ADX) on Sunday following the release of the company's quarterly results earlier in the day.
Abu Dhabi's largest real estate company reported a net profit of Dh506 million (US$137.7 million) for the second quarter, up 168 per cent on the Dh189 million from a year earlier.
The second quarter profits do not include the Dh1.063 billion cash asset gained from last year's merger with Sorouh Real Estate.
"The operational achievements during the quarter have been particularly impressive with sales and leasing activity at an all-time high, as our residential properties continue to benefit from a flight to quality,” Aldar Properties chief executive Mohammad Khalifa Al Mubarak said in a statement.
Revenue for the second quarter was Dh2.19 billion, up 74 per cent year-on-year. Recurring revenues rose 45 per cent to Dh526 million, largely due to faster than expected take up on leasing at its Al Rayyana development, the statement said.
Aldar, which is majority owned by the Abu Dhabi government, cut gross debt to Dh10 billion, down from Dh14.2 billion a year earlier. It has also refinanced Dh1.6 billion of bank loans and used cash and Dh4 billion in undrawn bank facilities to repay a US$1.25 billion bond that was due in May.
Fully funded
"The business is in very good financial health and our cash position remains strong. We are fully funded in the short-medium term, but are always keeping an eye on the market and will act when the time is right,” Aldar's chief financial officer Greg Fewer told Gulf News in an email on Sunday when asked about future cash needs.
Aldar, which had Dh3.9 billion in cash as of June 30, benefitted from a combined US$10 billion bailout from the Abu Dhabi government in 2010 and 2011 as real estate prices and property demand in the emirate plunged.
Aldar said that 95 per cent of Yas Mall is now committed to retail tenants and is on schedule to open in November 2014. Fewer told news agencies in a conference call on Sunday, the mall will contribute around Dh400 million to recurring income once it is up and running.
"You would expect the commercial side to contribute a lot more [to revenues] in the second half as Yas Mall kicks in,” Craig Plumb, Head of Research for Middle East and North Africa at JLL, told Gulf News by phone on Sunday.
While Aldar said that its commercial office portfolio is 86 per cent leased, Plumb said private sector demand for office space in Abu Dhabi remains weak.
There is limited demand in the commercial sector outside the government, which tends to build its own offices, Plumb said.
In April, Aldar announced three projects with a total gross development value of Dh5 billion.
Source: Gulf News