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Abu Dhabi Construction Giant Crushes Predictions as Profit Jumps 15%
Aldar Properties, Abu Dhabi's biggest developer and the construction company responsible for a Ferrari theme, announced first-quarter profits that crushed expert's predictions as recurring income gained and home sales stabilized amid high demand from families.
The property developer, partially owned by a wealth fund connected to the royal family, has been kick-starting its revenue - including income generated from mega-malls, hotel businesses and rented homes and offices - to protect against instability in home sales. The company has completed a debt reduction strategy and is concentrating on new developments after previously benefiting from a large government subsidy.
"The real estate sector continues to be strong in the country," Talal Al Dhiyebi, CDO of Aldar, said in a phone call with journalists. "The supply and demand for quality properties in Abu Dhabi has been quite stable."
Quarterly revenue gained 4.3% to 1.26bn dirhams which made up 63% of the gross, the company announced. Gross profit from revenue soared 11% to 405 million dirhams in the same quarter.
They pre-sold 325 homes in the first quarter. Like many developers, the company accounts for profit on residential units sold in advance as building progresses and clients make instalments.
David Knightley, Head of Institutional Equities, Trading and Research with Toronto and Tokyo based Monex BMO Securities (http://monexfinancial.com) commented, "Abu Dhabi is continuing to spread like wildfire. With the projects that have currently underway and those planned for the future it's a very exciting time to be in the construction sector in this part of the world."
The nation has seen a large increase in demand in the last three years after the exit of "investors that hurt the market" in the previous crisis, Al Dhiyebi added.
Aldar will splash out 5.4bn dirhams completing construction in the next two years, CFO Greg Fewer said.
Monex BMO Securities
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