Aldar Properties profits slump for Q2

Profits have slumped

Abu Dhabi-based property developer Aldar has reported its third consecutive quarterly loss as low sales battered the company's bottom line.

According to Bloomberg, basing their calculations on half-yearly data, second quarter losses totalled US$129.4 million. As such, first half loses were US$214.9 million, despite a profit of US$300 million a year earlier.

In a statement, Aldar Properties stated that the decrease was "principally due to lower property sales recognised.

"The second half of this financial year is expected to be different due to the revenue generated from the delivery of Aldar's projects at Al Raha Beach and Al Gurm."

Aldar was hit hard due the Dubai debt crisis and the global recession, both of which caused property prices to decline by almost 30 percent from their 2008 peak. As such, Aldar's half-year revenue was essentially halved.

Despite poor profits, Aldar is currently overseeing massive developments, such as the building of thousands of homes, offices and hotels in the United Arab Emirates' capital. Plans include the construction of 272 apartments and 75 villas and townhouses in the Abu Dhabi, all of which have been pre-sold to an unidentified buyer.

In April, the company also won a US$200 million contract with Abu Dhabi's government to build infrastructure for a project in Al Ain city.

Hard times

Aldar Properties is not the only one to see massive profit losses. Sorouh Real Estate Co., Abu Dhabi's second-biggest property developer by market value, reported a 79 percent decline in second-quarter profit this week after land sales evaporated.

Aldar Chairman Ahmad Al Sayegh said: "Throughout this period we have taken all the appropriate actions to ensure the business returns to recurrent value creation for all our stakeholders in the near future."

In the second half of 2010, Aldar has targeted the delivery of a number of projects such as the opening of Ferrari World Abu Dhabi, the opening of the Souq at the Central Market, Al Bandar residential development, and the arrival of long leasehold tenants into HQ, the international Grade A office space within Al Raha Beach.

Relevant articles:

Foreign direct investment in Middle East falls by a quarter | Middle East SMEs most confident | Are family owned firms deterring investors?

Like this article? Get the RSS feed: