Aldar Gains Most in 6 Weeks in Abu Dhabi on Government Funding Speculation
Aldar Properties PJSC climbed the most in six weeks on speculation that Abu Dhabi’s biggest developer will secure government funding after posting its biggest quarterly loss on record.
The shares rose 3.2 percent at 2.29 dirhams in Abu Dhabi, the most since Sept. 26. Aldar expects to reach a “framework” agreement with the state on “cash requirements” by the end of the year, it said in a statement today.
Abu Dhabi’s government aided Aldar earlier this year when it agreed to buy assets on the Yas Island leisure resort from the developer for 9.14 billion dirhams ($2.49 billion). The company, 19.2 percent-owned by state-backed investor Mubadala Development Co., has been hurt by slumping sales, falling asset values and about 26 billion dirhams of outstanding debt.
Aldar today reported a third-quarter loss of 731.2 million dirhams compared with net income of 270.1 million dirhams a year earlier. The median estimate of three analysts surveyed by Bloomberg was for a loss of 215 million dirhams.
“Aldar is in the final stages of discussions with the Abu Dhabi government regarding the company’s cash requirements and anticipates that a framework will be concluded before the end of the fourth quarter 2010,” it said.
“This alleviates some of the concern out there,” Majed Azzam, a real-estate analyst at HC Securities in Dubai, said. “The main issue is not its quarterly performance but rather its liquidity position.”
The Abu Dhabi based company reported a nine-month loss of 1.52 billion dirhams, after a profit of 1.41 billion dirhams a year earlier. The shares, which climbed as much as 9.5 percent today, are down 54 percent this year.
Aldar will need 9.8 billion dirhams by 2011 to “survive” as the United Arab Emirates’ real-estate market recovers, Bank of America Merrill Lynch said Nov. 4.
To contact the editor responsible for this story: Andrew Blackman at email@example.com.
Bloomberg moderates all comments. Comments that are abusive or off-topic will not be posted to the site. Excessively long comments may be moderated as well. Bloomberg cannot facilitate requests to remove comments or explain individual moderation decisions.