Aldar Properties revealed a second quarter net profit jump of 200 per cent and a half-year profit rise of 57 per cent on Wednesday, attributing the huge gains to its merger with rival firm Sorouh Real Estate.
In the Abu Dhabi developer’s first financial announcement since the merger was completed in June, Aldar said quarterly earnings included a one-time gain of Dhs2.6 billion principally driven by the handover of land plots and residential units as part of the acquisition of Sorouh’s assets.
Aldar’s Q2 net profit of Dhs1.25 billion was up from Dhs418 million on the same period a year earlier while H1 net profit stood at Dhs1.41 billion, up from Dhs896 million in 2012.
However, revenues for Aldar, the builder of Abu Dhabi’s Formula One racetrack, were down on prior year periods.
Second quarter revenue dropped to Dhs1.3 billion from Dhs4.6 billion in 2012, while H1 revenue was down from Dhs8.22 billion to Dhs2.89 billion.
The group attributed the revenue slides to handing over 479 units in the first half of 2013 compared to 1,058 units in the first half of 2012.
Speaking to reporters on Wednesday, Aldar’s chief financial officer, Greg Fewer, said the group has outstanding liabilities of Dhs14 billion and is planning to refinance outstanding debt including a $1.2 billion bond maturing next year.
Recurring revenues from investment properties, hotels and schools for the first half of the year were up 10 per cent from Dhs699 million to Dhs767 million while total assets grew 36 per cent from Dhs32 billion to Dhs43.7 billion, due to the merger.
Gearing (net debt to equity) reduced to 60 per cent from 144 per cent. Cash position remained strong with Dhs5.4 billion of cash and available liquidity.
Giving an update on the merger with Sorouh, the financial report said: “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 two per cent 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 Dhs2.1 billion.”