Aldar posts strong revenue, profit in Q2

Leading Abu Dhabi developer, Aldar Properties, on Thursday reported a 21 per cent year-on-year rise in revenue to Dh2.01 billion in the second quarter of 2020, thanks to a strong performance from its development business.
The company's net profit for the second quarter rose two per cent from the previous year to Dh484 million as gross profits surged seven per cent to Dh716 million, the company said in a statement. In the first half of 2019, Aldar reported a 15 per cent year-on-year increase in revenue to Dh3.42 billion and a solid net profit of Dh969 million.
"Revenue growth was driven by robust demand for its prime developments and infrastructure-enabled land, while Aldar continued to earn steady fee income from its third-party development management business. The Abu Dhabi real estate market is being underpinned by government incentives for home buyers, fiscal stimulus measures and programmes to promote private sector growth," Aldar said.
Aldar sustained a healthy financial position with access to Dh5.9 billion of free cash and undrawn, committed credit facilities as at June 30, following payment of Aldar's 2019 dividend of Dh1.14 billion in April 2020. Debt levels across both development management and asset management remained well within the company's established debt policies.
Talal Al Dhiyebi, CEO of Aldar, said the developer's "highly sustainable and diversified business model is demonstrating strong earnings power even in a challenging global macro-economic environment."
"Abu Dhabi's real estate fundamentals remains well supported. The market benefits from well managed supply and a strong investor base is displaying confidence and fueling demand for quality developments in prime locations," he added.
He said that Aldar's development business had a standout quarter, adapting quickly to arrange innovative financing packages and to roll out digital solutions, ensuring service excellence for its customers. This drove growth in revenue and profits and strong cash-flow generation. "Our prime investment properties continue to perform solidly, and as the most efficient platform for real estate ownership in the region, we are looking at attractive opportunities to expand our diversified portfolio."
Aldar's development management business recorded Dh1.27 billion in development revenues in the second quarter, an 83 per cent year-on-year increase. The growth was driven by strong progress at projects under development, robust inventory sales and the company's fee-based business, including the Dh5 billion of contracts with the Abu Dhabi government announced in 2019.
The company said that despite deferral of new project launches, second-quarter development sales stood at Dh505 million, on account of strong inventory sales at Nareel Island and Yas Acres, as well as sales of land plots on Saadiyat Island. Investments towards the digital transformation strategy have yielded substantial benefits enabling uninterrupted sales, customer inspections and handovers to continue virtually.
The asset management business reported a 21 per cent year-on-year decline in net operating income, with hospitality and retail properties temporarily closed for much of the period. Occupancy rates across the investment properties portfolio, which includes residential, retail, and commercial assets, stood strong at 88 per cent. While Aldar-owned hotels were unavailable for commercial activity during most of the second quarter, they were provided to the government for quarantine purposes to support national efforts to combat Covid-19.
issacjohn@khaleejtimes.com