Real estate financier Amlak reports 52% drop in 2017 net profits
The Islamic real estate financier's net profits registered a 52% decrease in 2017, dropping to $14m (AED51m) from $29.1m (AED107m) in 2016
Dubai-listed Islamic real estate financier, Amlak Finance PJSC, has released its financial results for the year ending 31 December, 2017.
In a statement submitted to the Dubai Financial Market, the company said that its net profits registered a 52% decrease in 2017, dropping to $14m (AED51m) from $29.1m (AED107m) in 2016.
Amlak’s total revenues, including sale of properties under development, also declined, going down by 44% to $117.6m (AED432m) from $211.8m(AED778m) in 2016.
The decrease in revenues was due to a reduction in the sale of properties under development, the company revealed, adding that its total assets went up by 1% to $1.8bn (AED6.6bn) from 1.77bn (AED6.5bn) last year.
Amlak explained that the slight increase was mainly a result of the rise in its “real estate investment assets (fair value gain) set off against a decline in real estate finance assets (financing portfolio)”.
The company’s revenue from financing business activities stood at $52m (AED191m) in 2017, 8% less compared to last year's $56.4m (AED207m).
Meanwhile, its revenue from sales of real estate assets recorded a significant decline of 88%, falling to $14.2m (AED52m) from $116.8m (AED429m) in 2016. The decrease was “mainly due to higher sales and transfers of properties under development to customers in 2016”.
Amlak also reported that its fair value gain on investment properties increased from $4.9m (AED18m) to $19.1m (AED70m), owing to the completion of a real estate development in Mirdif.
According to the company, cost rationalisation initiatives across its business contributed to cost savings in 2017, with operating costs falling from $40.6m (AED149m) to $33.2m(AED122m).
Amlak said it is expecting to see continued savings in operating expenses in 2018.
Amlak emphasised that it will continue to develop land parcels to enhance real estate value, in a bid to expedite the fulfillment of its restructuring commitment to financiers and create value for shareholders. Its plans for this year include continuing the infrastructure development project in Nad Al Hamar and a number of plots in Al Ttay.
The company is also in the process of planning the development of Nasr City Land in Egypt.
Amlak Finance’s chairman, Ali Ibrahim Mohammed, commented: “Despite a challenging global economic environment, our 2017 results reflect an overall positive operational performance, which is in keeping with our strategy and efforts over the past year.
“For 2018, we have clear strategies in place for creating more value for our shareholders, providing leading customer service, nurturing our employees, [and] fulfilling our corporate social responsibility (CSR).
“With a more positive outlook for the UAE economy in the coming year, we are certain that Amlak will continue its growth trajectory in the right direction.”