Aldar gross profit surges 14% in Q3

Leading Abu Dhabi developer, Aldar Properties, reported a 14 per cent year-on-year increase in gross profit to Dh662 million in the third quarter of 2019 on the back of a seven per cent surge in revenue to Dh1.60 billion from Dh1.50 billion in Q3 2018.
In a statement, the company, attributing the growth to off-plan development sales surge and a strong momentum in development sales, said nine-month gross profit grew six per cent to Dh2.05 billion compared to Dh1.94 billion in the same 2018 period as revenue for the period surged to 12 per cent to Dh5.03 billion from Dh4.48 billion in the same 2018 period.
Talal Al Dhiyebi, Chief Executive Officer of Aldar, said the developer's customer-centric business model continues to deliver sustainable, broad-based growth.
"Development sales have seen strong momentum this year following the successful launch of new projects. Robust demand from end users for our off-plan developments and infrastructure-enabled land plots is a positive sign for the Abu Dhabi real estate market and the wider economy," said Al Dhiyebi.
He said Aldar's large portfolio of rental properties owned and managed by Aldar Investments is producing predictable income streams that provide the strong base for our dividend. "Overall, government policies are building momentum and positive sentiment in the Abu Dhabi economy that are meaningfully contributing to Aldar's growing pipeline of business," said Al Dhiyebi.
Aldar' said its development management business reported a strong third quarter and year-to-date performance, based on a strategy that blends delivery of high-quality developments with demand-driven sales of infrastructure-enabled land plots. Gross profit increased 29 per cent to Dh 255 million in third quarter 2019
"While development management during nine months recorded 20 per cent growth in revenue to Dh642 million, off-plan development sales increased 272 per cent to Dh1.1 billion," said the statement.
The company also recorded solid performance from the asset management business, with net operating income (NOI) increasing by four per cent to Dh397 million.
In the third quarter, net profit decreased eight per cent to Dh387 million compared to Dh420 million in the same 2018 quarter, "due to higher non-recurring income in 2018, primarily from government reimbursement payments for completed infrastructure delivered by Aldar."
The statement said a $500 million sukuk issuance by Aldar Investments in mid-October was six times oversubscribed and received strong demand from international investors. The transaction served to extend the duration of Aldar's debt liabilities and reduce financing costs.
New projects launched and awarded in 2019 reached a total development value of close to Dh10 billion (Dh5 billion between Alreeman I, Alreeman II, Lea and Reserve; Dh5 billion from Government-awarded contracts.
In third quarter, off-plan sales were recorded at Dh1.1 billion, primarily driven by the successful launches this year of Lea and Alreeman II as well as sales on existing projects under development including Yas Acres. In the first nine months, off-plan development sales totalled approximately Dh3.0 billion, a 128 per cent increase from the same period in 2018.
In July 2019, the Abu Dhabi government awarded Aldar Dh5 billion worth of construction projects across several key Abu Dhabi areas and landmarks. These include a Dh2 billion project to develop the expansion of Al Falah housing community on behalf of the government, adding 899 new villas to the community's existing 4,898 villas; a Dh1 billion project to develop twofour54's new campus that will ultimately house 10,000 professionals on Yas Island; and a Dh 2 billion worth of infrastructure works on Saadiyat Island. - issacjohn@khaleejtime.com