A wave of exceptionally hot weather has blasted parts of South and Southeast Asia this week
Islamic real estate financier Amlak Finance came out of the red in the first quarter of 2021 after recording net losses over several quarters.
On Sunday, it reported a net profit of Dh6 million, compared to a Dh139 million net loss in 2020. For last year, the mortgage lender reported a net loss of Dh438 million, compared to Dh320 million net loss in 2019.
Amlak said in a statement that its revenues decreased by 13 per cent to Dh62 million compared to Dh71 million in the year-ago period, excluding fair value losses on investment properties and gain on debt settlement.
Revenues from financing business activities in the three-month period were broadly in line with 2020 at Dh43 million in 2021 (versus Dh44 million), while rental income decreased by 49 per cent to Dh7 million (against Dh13 million).
The company said it executed debt settlement arrangements during the quarter, which enabled a successful exit for two financiers.
“Amlak’s focus on efficient operations in 2021 delivered a 16 per cent reduction in operating costs to Dh24 million in Q1 2021 [Q1 2020: Dh28 million],” the company said.
Amlak also continued to efficiently manage its obligations, including repayment of Dh71 million to financiers during the first quarter.
The company recorded an amortisation cost of Dh32 million in the first quarter compared to Dh22 million a year ago. 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 made to the financiers in any reporting period.
“As a result of debt settlements and repayments to financiers, the profit distributed to financiers decreased and stood at Dh23 million for Q1 2021 as compared to Dh 25 million for Q1 2020,” Amlak's statement said.
In 2020, Amlak renegotiated an agreement with all the financiers that govern the new terms of its debt restructuring. The company initiated the process to carry out the new terms of the agreement, which allow more flexibility to adapt to current market conditions enabling the company to achieve further business growth.
— issacjohn@khaleejtimes.com
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