• Developer's profit climbs on sales, surge in recurring revenue
  • Aldar to spend 5.2b dirhams in 24-29 months building projects

Aldar Properties PJSC, Abu Dhabi’s largest developer and the builder of a Ferrari theme park, posted first-quarter profit that beat analysts’ estimates as recurring income rose and home sales held up amid demand from families.

Net income advanced to 649 million dirhams ($176.7 million) compared with 569 million dirhams a year earlier, the company said in a statement to the Abu Dhabi stock market Tuesday. The mean estimate of four analysts was for profit of about 431 million dirhams, according to data compiled by Bloomberg.

The developer, partly owned by an Abu Dhabi sovereign wealth fund, has been boosting its recurring revenue - including money generated from malls, hotels, leased homes and offices - to guard against volatility in home sales. The company has finished a debt reduction plan and is focused on new developments after earlier receiving a government bail out.

“The real estate market is still strong in Abu Dhabi,” Talal Al Dhiyebi, chief development officer, said on a call with reporters on Tuesday. “The demand and supply for quality products in Abu Dhabi has been relatively balanced.”

Quarterly revenue climbed 4.2 percent to 1.23 billion dirhams, supported by recurring income, which made up 61 percent of the total, the company said. Gross profit from recurring revenue surged 10 percent to 403 million dirhams during the quarter.

The company pre-sold 320 homes in the first three months of the year, valued at about 940 million dirhams. Like other developers, Aldar accounts for profit on homes sold in advance as construction progresses and customers make installments.

Abu Dhabi has seen a significant increase in “real end user demand” in the past few years after the exit of “speculators that ruined the market” in the last crisis, Al Dhiyebi said.

Aldar will spend 5.2 billion dirhams completing developments in the next 24 to 29 months, Chief Financial Officer Greg Fewer said. The company is building developments such as Mayan, Meera and Al Nareel.

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