Aldar reports revenue slump for H1 2010

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Aldar reports revenue slump for H1 2010

29 Jul 2010

Abu Dhabi's leading property development investment and management company, Aldar Properties has announced profits were down in the first six months of 2010.

Revenue for the period was AED 427.0 million compared to AED 1,068.1 million for the corresponding period last year. The company said the decrease was ‘principally due to lower property sales recognised.’ But added recurring revenues from operating businesses ‘are showing continuous growth as these areas of the company mature.’

The second half of this financial year is expected to be different due to the revenue generated from the delivery of Aldar’s projects at Al Raha Beach and Al Gurm.

The company incurred a net loss for the period of AED 789.5 million compared to a net profit of AED 1,142.5 million for the period ended 30 June 2009. As was highlighted at the end of Q1, this is primarily due to lower gains from fair valuation of investment properties, and lower property sales recognised.

Net asset value stood at AED 15,700.0 million at 30 June 2010, compared to AED 16,650.5 million at 31 December 2009. Investment in projects under construction (comprising investment properties under development and development work in progress) was AED 21,225.8 million compared to AED 17,923.6 million at the end of 2009, as Aldar continues its focus on completion and delivery of its existing pipeline.

The business has worked hard throughout this period to review its business model to ensure it remains resilient and able to effectively meet the challenges of the prevailing market conditions. There has been a continued focus on its areas of growth which are low risk, solid income generating projects, such as major government infrastructure projects, and increased revenue from operational businesses.

The company made AED 695.0 million worth of sales during the first six months of this year, which will be recognised in future periods and raised AED 1,567.3 million of new financing during the period, which demonstrates Aldar’s continued ability to add to its financial resources.

The second half of 2010 presents a number of key milestones for the business including:

· The opening of the Souk at Central Market in the coming weeks

· The complete delivery of the Al Bandar residential development to customers

· The arrival of long leasehold tenants into HQ, the international Grade A office space within Al Raha Beach

· The opening of Ferrari World Abu Dhabi, the world’s largest indoor theme park

Meanwhile work continues on Al Falah, a Government-funded Emirati housing project. This development is part of a growing pipeline of management fee earning Government and third party projects, which include the recently announced agreement with Al Ain Municipality to deliver the infrastructure for the Shiebat Al Watah development.

Consequently the board is confident that these events will contribute to an improved performance in the second half. Ahmed Al Sayegh, chairman of Aldar Properties, said:

“With the ongoing impact of the difficult global economic situation, this has been a very challenging first half of the year for the entire sector.

However, whilst recovery remains fragile in many parts of the world, Aldar is well positioned to benefit from the improved conditions expected in the second half of the year, with the added positive impact of the delivery of a number of flagship developments such as the Al Bandar residential development, Ferrari World Abu Dhabi theme park and the iconic HQ office building.

Throughout this period, we have taken all the appropriate actions to ensure the business returns to recurrent value creation for all our stakeholders in the near future.”

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