Aldar posts $3.44bn loss for 2010
Developer suffers further property woes despite project deliveries
Aldar Properties, Abu Dhabi’s biggest developer, posted a loss of AED12.658 billion for 2010 on the back of steep declines in regional property values, despite the continuation of several key projects.
The company’s loss before the impairments linked to so-called ‘fair value’ measurement of property – marked at current market price – stood at AED1.35 billion, against a net gain of AED354.1 million in 2009, a result the company attributes to an increase in the depreciation charge and finance costs for the year.
The write-down in the value of its assets to market prices, which compounded the loss, aimed “to reflect the adverse conditions that have reflected the real estate market in the UAE”.
The company has sought to restructure its debts to get on a firmer financial footing following the decline in market values, which also weighed on half-year results up to June 2010.
In December the company sold Ferarri World, its car themed amusement park, as well as related infrastructure to the government for AED10.9billion, along with an AED5.6billion sale of land and houses.
Aldar’s board also recently approved the issuance of AED2.8 billion in convertible bonds to Mubadala Development Company, a state-backed investor.
Revenue, mainly generated from land and property sales, rents, property investments and other businesses, fell by more than 92% to AED818.4million from AED1.57billion the previous year, although returns from project and asset management services helped the company’s other operational segments rise from AED394.2million to AED964.6million.
Higher depreciation charges helped push up the company’s general expenses by 27%, partly offset by cutting staff costs by a quarter.
But the company completed a number of key projects in and around the UAE capital, including the Yas Links Golf Course. Al Bandar and Al Gurm projects were also handed over to owners, and it plans to complete projects in Al Muneera and Al Zeina this year. The value of its development work in progress rose 27% for the year to AED13.8billion against the total value in 2009.
Ahmed Al Sayegh, Aldar chairman, said the commitment to complete projects would have “a positive long term impact for Abu Dhabi”.
“We have also put in place new financial framework, focused on strengthening the capital structure and ensuring the business has a sustainable future,” he said.
The company’s shares have steadily decreased in value since April, reaching their lowest level on record on at the end of January at AED1.65. Yesterday the shares closed down 3.2% to AED1.8 on news of the company’s losses for the year.