Aldar Properties posts AED731m third quarter loss
Developer continues slump as it nears endgame over government funding
Aldar Properties posted its heaviest loss for a quarter on the back of a struggling property market and a slump in sales as it seeks government aid to fund operations.
Abu Dhabi’s biggest developer saw a net loss of AED731.2 million against a net profit of just over AED270 million for the same period last year. The losses are part of an AED1.52 billion loss for the first nine months of 2010, against an AED1.4 billion gain last year. Nine month revenue fell 45% to AED932.4 million from the AED1.412 billion in 2009.
“This is primarily due to lower gains from fair valuation of investment properties, provisions for bad debts and lower property sales recognised,” the company said in a statement released to the Abu Dhabi Stock Exchange.
The company said it is in final-stage discussions with the Abu Dhabi government regarding the company’s cash requirements and anticipates that a framework will be concluded before the end of the year. Last week saw the resignation of chief executive John Bullough.
The third-quarter losses come on top of a AED789.5 million net loss for the first half of the year, as its revenues more than halved, despite seeing an increase in projects investment since the end of last year, from AED17.9 billion to AED 21.2 billion. The company reported it had secured more than AED1.5 billion of additional financing.
However, the company has been able to complete a number of projects this year, including the handover of units at the Al Bandar island development at Al Raha Beach in September; the completion of its HQ building outside the UAE capital city, that has also seen a number of tenants sign with the company; the completion of the infrastructure work on Yas Island; and the opening of Ferrari World, the race-car themed amusement park that opened to the public last Thursday.
The company’s shares have risen so far today by more than 3% today. Its shares have lost 14% up to the close of the market yesterday.
Analysts recommendations for the stock have been mixed over the last three months. JP Morgan and the team at TAIB Securities posted an ‘overweight’ position on the company in August, following by a ‘hold’ rating by Athmane Benzerroug at Deutsche Bank and a ‘sell position from the team at EFG Hermes in Dubai. On 4th Majed Azzam recommended an overweight position.