Aldar Properties PJSC, an Abu Dhabi developer, said it will reduce its workforce by 24 percent as it restructures.
“Aldar’s new strategic plan takes into account the existing market environment,” the company said in a statement posted on the Abu Dhabi bourse today. It will “selectively target new developments where there is demonstrable demand, and increase Aldar’s large-scale fee-based development activities.”
The company will shed 105 jobs and “continue to concentrate on its core Abu Dhabi market,” according to the statement.
Aldar, which is building thousands of homes and offices across the United Arab Emirates’ capital, agreed in January to sell assets including a Ferrari theme park and convertible bonds to the Abu Dhabi government for 19.2 billion dirhams ($5.23 billion) to pay creditors. Property values and rents slumped in the U.A.E. after banks curtailed lending and speculators left the market during the global recession.
The developer appointed Greg Fewer as chief financial officer this month, replacing Shafqat Ali Malik, who resigned.
“Low margins are forcing companies to rethink their cost structure,’” said Tariq Qaqish, deputy head of asset management at Dubai-based Al Mal Capital. “With the slowdown in real estate projects in Abu Dhabi, I would expect companies to re-strategize to focus on recurring income and cash flows.”
Aldar reported a profit of 127.3 million dirhams in the second quarter after a loss of 475.3 million dirhams a year earlier.
The shares retreated as much as 3 percent, the most in two weeks, and closed at 1.06 dirhams. Shares have dropped 54 percent this year, compared with an 8 percent decline in the benchmark ADX General Index.
With assistance from Alaa Shahine in Dubai.--Editors: Chris Peterson, Alan Purkiss