Amlak Finance posts Dh1.08b net profit

Amlak Finance on Sunday said the company’s focus on prudently managing its UAE operations and balance sheet improved its financial performance this year.

In a statement, the company said group’s net profit reached at Dh1.08 billion and total assets amounted to Dh4 billion during the January-September 2021 compared to net loss of Dh239 million in the same period last year.

Amlak’s July-September quarterly income increased by 367 per cent to Dh1,248 million as compared to Dh267 million in the same quarter last year excluding fair value losses on investment properties. Increase in income is mainly related to the settlement of the arbitration and the gain resulted from the debt settlement arrangements.

July-September 2021 revenues from financing business activities decreased by two per cent to Dh126 million as against Dh129 million in the same period last year.

Rental income also decreased by 48 per cent during the first nine months of 2021 to Dh19 million from Dh35 million in the similar period last year.

The company successfully concluded the settlement of the arbitration ruling in Amlak’s favour with a net value of approximately Dh875 million including both plots and partial cash installments to be paid over 24 months.

The company’s debt settlement arrangements, through cash and real estate assets swap, remained successful during the period, and enabled four financiers to fully settle and two financiers to partly settle their exposure in the first 9 months of 2021.

Operating costs increased by 46 per cent to Dh110 million in September 2021 compared to Dh75 million during the same period last year due to recording of acquisition cost of newly acquired plots in settlement of arbitration.

The company also continued to efficiently manage its obligations, including recurring repayment of Dh148 million to financiers till September 2021.

The company recorded an amortisation cost of Dh125 million in September 2021 as compared to Dh80 million in September 2020. The amount of amortisation represents the unwinding of fair value gains on initial recognition of investment deposits, and varies according to the level of repayments and settlements made to the financiers in any reporting period.

As a result of debt settlements and repayments to financiers, the profit distributed to financiers decreased by 12 per cent and stood at Dh67 million in September 2021 as compared to Dh76 million for the same period last year.

— muzaffarrizvi@khaleejtimes.com