Aldar Reports Third Quarterly Loss as Property Sales Drop, Misses Forecast

Aldar Properties PJSC reported its third consecutive quarterly loss as the biggest real-estate developer in Abu Dhabi suffered from lower sales.

Second-quarter loss was 475.3 million dirhams ($129.5 million), according to Bloomberg calculations based on half- yearly data provided by the company today. The average estimate of seven analysts was for a loss of 210 million dirhams for the quarter, according to data compiled by Bloomberg. The company said first-half loss was 789.5 million dirhams after a profit of 1.14 billion dirhams a year earlier.

“The decrease was principally due to lower property sales recognized,” Aldar said in an e-mailed statement. “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.”

Property prices in Abu Dhabi have declined by more than 30 percent from their peak in mid 2008 even as a housing shortage in the capital persists, according to Jones Lang LaSalle estimates published in February. Aldar’s first-half revenue more than halved to 427 million dirhams from 1 billion dirhams a year earlier, while sales valued at 695 million dirhams made in the first half will be included in future income, the company said.

“We expect revenue and earnings to remain muted due to lack of land sales and large-scale unit deliveries,” most of which are scheduled for the second half, Deutsche Bank AG’s analyst Nabil Ahmed wrote in a note to clients on July 7. The investment bank expects the company’s recurring revenues from rentals and hotels “to ramp up.”

Building Contracts

Aldar, which is building thousands of homes, offices and hotels in the United Arab Emirates’ capital, plans to build 272 apartments and 75 villas and townhouses in the emirate’s capital, all of which have been presold to an unidentified buyer, Chief Executive Officer John Bullough said on April 20. The following day, the company said it won a 730 million-dirham order from Abu Dhabi’s government to build infrastructure for a project in Al Ain city.

Sorouh Real Estate Co., Abu Dhabi’s second-biggest property developer by market value, this week reported a 79 percent decline in second-quarter profit after land sales evaporated.

Aldar shares rose 0.4 percent to close at 2.46 dirhams in Abu Dhabi trading today before the earnings were released. The shares slumped 51 percent this year, giving the company a market value of 6.3 billion dirhams.

To contact the reporter on this story: Zainab Fattah in Dubai on zfattah@bloomberg.net.

• Tweet
• More
  • Business Exchange
  • Buzz up!
  • Digg
• Print
• Email