07 August, 2013

Highlights

  • Q2 net profit of AED1.25bn, up 200%. Half year net profit of AED1.41bn, up 57%
  • Continued progress on the handover of land plots and units driving operating profits
  • Steady growth of recurring revenues, up 10% for the half year
  • Strong delivery pipeline with over 7,400 units to be delivered in the next 12 months
  • Merger with Sorouh completed: balance sheet strengthened and gearing reduced from 144% to 60%
  • Shareholder's equity increased by 90% from AED8.2bn to AED15.5bn

Financial Update

Aldar Properties PJSC ("Aldar or "the Company ADX: ALDAR ), Abu Dhabi's leading property development, investment and management company, today announced its financial results for the half year and second quarter period ending 30 June 2013.

Q2 net profit of AED1.25bn, up 200% (Q2 2012: AED418m). The profit for the quarter was principally driven by the handover of land plots and residential units, steady growth from recurring revenue assets and a one-time gain on the acquisition of Sorouh's assets offset by certain asset impairments.  Net profit for the half year was AED1.41bn up 57% (H1 2012: AED896m).

Revenues of AED1.26bn during Q2 were generated from the on-going handover of serviced land at Al Raha Beach East, the start of residential unit handovers at Tala Tower, revenues from national housing projects and recurring income from the investment properties portfolio. H1 revenues amounted to AED2.89bn (H1 2012: AED8.22bn). Half year revenues were less than the corresponding period last year as the Company handed over 479 units in the first half of 2013 compared to 1,058 units in the first half of 2012.

Recurring revenues from investment properties, hotels and schools were up 10% to AED767m during the first half (H1 2012: AED699m).

Total assets grew 36% from AED32bn to AED43.7bn owing to the merger. Gearing (net debt to equity) reduced to 60% from 144%. The cash position remained strong with AED5.4bn of cash and available liquidity.

Merger Completed

The merger with Sorouh completed during Q2.  Good progress is being made on the integration of the two businesses, which is on track to be substantially complete by year end. Significant financial synergies have already been achieved, including an interest margin reduction of over 2% per annum on the loan facility entered into on 28 June 2010 between Sorouh and a syndicate of banks, which has an outstanding balance of AED 2.1 billion.

OPERATIONS UPDATE

Development Projects

Residential

  • Handover has started on 577 units in two towers on Al Reem Island. Tala Tower, the 375 apartment residential tower, was 70% handed over to owners during the second quarter. We also expect handover of a further 202 units in the tower adjacent to Tala Tower in Q3.
  • Building completion certificates have been awarded on three residential towers at The Gate Towers, the 3,533-unit development on Al Reem Island and the handover will begin handover in Q4 2013.
  • The first phase of the 2,130-unit alghadeer development in the eastern region of Abu Dhabi is now ready to be handed over to owners.
  • At alrayyana, tenants will be able to move into the development in the coming months. Leasing activity will commence towards the end of the year and there is already significant interest for bulk leases at the development.

Retail and commercial

  • The construction of Yas Mall, Aldar's 233,000 sqm flagship retail development on Yas Island, is progressing well and is 80% complete.
  • At World Trade Center Abu Dhabi, managed by Aldar, final preparations are being made for the opening of The Mall by the end of this year.

Land

  • 17 plots of land was handed over during the quarter as part of the ongoing programme of delivery of serviced land at Al Raha Beach East, which will continue into 2014.

Investment properties and operating businesses

 Offices

  • Aldar's office portfolio has expanded following the merger with Sorouh and now consists of 263,000 sqm of high-grade commercial premises. HQ building is now 82% let or under heads of terms.

Residential leasing

  • Aldar's residential leasing portfolio has increased considerably following the merger and will be strengthened further with the handover of alrayyana and The Gate.

Hotels

  • Occupancy levels in the hotel portfolio continued to rise in Q2, with occupancy up to 78% versus 58% in Q2 2012.

Commenting, H.E. Abubaker Seddiq Al Khoori, Chairman of Aldar Properties, said:

"The merger of the two companies is already delivering significant benefits.  This includes a strengthened financial position as shareholders equity has almost doubled, gearing has more than halved and the business has a more balanced and diversified portfolio.  Good progress is being made with the integration of the merger and we have already commenced the realisation of financial synergies by reducing the company's cost of borrowing.

Aldar is well-positioned to capitalise on the solid growth fundamentals of the Abu Dhabi economy. We will be handing over more than 7,400 units to customers over the next 12 months, reflecting the exciting growth ahead.  This strong pipeline, supported by our steadily growing recurring revenues, leaves us well placed to generate sustainable returns for our shareholders.

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