Aldar Properties, Abu Dhabi’s largest property developer, on Tuesday missed estimates with a 28 per cent fall in second-quarter profit which it blamed on a revaluation of properties related to its retail portfolio.
“We are seeing some headwinds; in the retail portfolio, we renewed leases and updated book values,” CFO Greg Fewer said on a media call.
The builder of Abu Dhabi’s Formula One circuit reported a net profit attributable to owners of Dhs446.5m ($121.6m) in the three months to June 30.
That was down from Dhs620.2m a year earlier and short of the Dhs561.9m and Dhs642m forecast by analysts at SICO Bahrain and EFG Hermes, respectively.
Aldar booked a Dhs189.9m loss on revaluation of its investment properties.
Revenue rose to Dhs1.51bn from Dhs1.35bn.
A sluggish economy and property market in the oil-rich capital of the United Arab Emirates has depressed values and rentals in the last two years.
Still, Aldar is optimistic, following a Dhs50bn stimulus plan announced by Abu Dhabi in June.
“We are excited about the stimulus from the government, there are programmes coming in the third quarter…. so a very solid market backdrop to drive sentiment,” said Fewer.
Aldar has also raised its capital expenditure plan for the next two years by Dhs1.3bns to Dhs6.7bn, he said.
In May, Aldar announced it had acquired Dhs3.7bns of real estate assets from Abu Dhabi’s Tourism Development & Investment Company (TDIC).
The cash transaction was closed and accounted for in the second quarter, Fewer said.