Amlak Finance annual profit drops 55% to Dh476 million in 2022

Debt settlement arrangements yielded Dh349 million net gain and contributed to total debt reduction of Dh1.07 billion including Mudaraba Instrument of Dh228 million

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A Staff Reporter

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Amlak has settled 77 per cent of its Islamic deposit liabilities including Mudaraba Instrument relating to financiers. — File photo
Amlak has settled 77 per cent of its Islamic deposit liabilities including Mudaraba Instrument relating to financiers. — File photo

Published: Tue 14 Mar 2023, 4:52 PM

Amlak Finance on Tuesday said its annual net profit dropped 55 per cent to Dh476 million last year from Dh1.06 billion in 2021 as the company focused on prudently managing its UAE operations and balance sheet.

In a statement, the region’s pioneer financial services said its income for the year 2022 decreased by seven per cent to Dh552 million as compared to Dh596 million during the previous year, excluding the arbitration settlement income.


Revenues from financing business activities for the year 2022 declined by 19 per cent as compared to 2021 and stood at Dh127 million last year as against Dh157 million in 2021.

Furthermore, net gain from debt settlement arrangements and successful closure of litigation cases generated a net gain of Dh379 million during 2022 as against Dh389 million in 2021.


“In the last year, we have witnessed remarkable growth across the country thanks to an improving market sentiment, rising consumer confidence and restored appetite across the real estate sector, and our results are in line with this promising growth,” Ali Ibrahim Mohammed, chairman of Amlak Finance, said.

“We recorded strong profits throughout the year, further strengthening and solidifying Amlak Finance’s financial position, which is testament to the robustness of our business strategy, prudent operations and balance sheet management and the hard work of all our employees. It is noteworthy to mention the success of our debt settlement program, among the year’s key achievements,” he said.

Debt settlement arrangements

The company’s debt settlement arrangements, through cash and real estate assets swap, remained successful during the year, enabling two financiers to fully settle and three financiers to partly settle their exposure during the year ended December 31, 2022. The company recorded a net gain of Dh349 million on debt settlement arrangements and was able to reduce its debt burden by Dh1.07 billion including Mudaraba instrument of Dh228 million.

Amlak’s operating costs in 2022 decreased by 26 per cent to Dh107 million as compared to the previous year’s Dh144 million.

The company also continued to efficiently manage its obligations, including repayment of Dh119 million to financiers during 2022. To date, Amlak has settled 77 per cent of its Islamic deposit liabilities including Mudaraba Instrument relating to financiers.

“During 2022, we have continued to demonstrate Amlak Finance’s strong resolve and resilience, achieving a number of significant milestones over the course of the year. The year was marked with the success of our debt settlement program resulting in full settlement of two financiers and a net gain of Dh349 million, further deleveraging financial obligations,” Arif Albastaki, CEO of Amlak Finance.

Profit distribution falls

The company also recorded an amortisation cost of Dh55 million in 2022 compared to Dh64 million in 2021 on regular investment deposits. The amount of amortisation represents the unwinding of fair value gains on initial recognition of investment deposits and varies according to the level of repayment and settlements made to the financiers in any reporting period.

As a result of debt settlement arrangements and repayments, the profit distribution to financiers decreased by 18 per cent and stood at Dh71 million for 2022 as compared to Dh87 million for 2021.

In the region, Amlak’s investment in Egypt witnessed the devaluation of the Egyptian pound against the UAe dirham which impacted the group’s financial position. In KSA, the investment yielded an income of Dh17 million.

“Our teams persevered, successfully recovering Dh129 million in legal recoveries while we also continued our focus on improving customer satisfaction and experience as well as on employee welfare, training and career development,” Albastaki said.

“Furthermore, we remained committed on enhancing our operations across Egypt through increased alignment with our UAE operations. We maintain our optimistic outlook and focus on targeting further growth, value-creation and financial sustainability,” he said.

— muzaffarrizvi@khaleejtimes.com


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