Aldar Third-Quarter Profit Surges After Writedown Isn’t Repeated

Aldar Properties PJSC, Abu Dhabi’s biggest developer said third-quarter profit almost after year earlier provisions and writedowns weren’t repeated.

Net income rose to 407.5 million dirhams ($111 million), or 5 fils a share, from 205.7 million, or 5 fils, a year earlier, the company said in a statement today. Revenue dropped 27 percent to 1.17 billion dirhams, while general and administrative costs more than doubled to 73.1 million dirhams.

Aldar, which bought competitor Sorouh Real Estate Co. in June, has 11.3 billion dirhams of debt maturing in the next 12 months, Chief Financial Officer Greg Fewer said on a conference call today. The company has 6.3 billion dirhams of cash and available liquidity and its evaluating options for the refinancing of some debt, the CFO said.

The company said today it secured two loans totaling 4 billion dirhams at an average margin of 1.3 percent above base-rate and average maturity of 3 1/2 years. The facilities will be used for refinancing, it said.

Aldar fell as much as 2.2 percent in Abu Dhabi trading and was down 1.5 percent at 2.67 dirhams as of 12:43 p.m. The stock has more than doubled this year.

Recurring revenue, generated by hotels, shops and home and office leases, climbed 54 percent to 471 million dirhams in the third quarter as Aldar benefited from the inclusion of Sorouh’s assets, the company said.

Improved Ratings

Aldar, which is central to Abu Dhabi’s efforts to transform itself into a business and tourism hub, suffered losses that led to more than $9.8 billion in government bailouts when the credit crisis caused the emirate’s property market to crash. The developer was recently upgraded by Moody’s Investors Service and Standard & Poor’s, both citing recurring income and steady payments from the government.

The developer is targeting a loan-to-value ratio of 35 percent to 40 percent measured against its investment properties by 2015, the CFO said. Aldar will receive 8.1 billion dirhams of contracted payments from the government which it will use to reduce its debt, Fewer said.

“We are now seeing greater stability as market fundamentals continue to improve,” Aldar Chairman Abubakr Seddiq Al Khouri said in the statement. “Aldar will benefit from this trend and the solid growth fundamentals of the Abu Dhabi economy as it hands over more than 7,000 units to customers during the next 12 months,” he said.

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