Aldar Q4 net rises 10pc on lower impairments
Abu Dhabi, February 4, 2013
Abu Dhabi's Aldar Properties , which is set to merge with its former rival in a state-backed deal, posted a 9.8 percent increase in fourth-quarter net profit as it booked lower impairments on its property portfolio.
Abu Dhabi's largest developer by market value, which approved a merger with Sorouh Real Estate in January, made a fourth-quarter net profit of 200 million dirhams ($54.5 million) compared with 182.1 million dirhams last year, Reuters calculations show.
The company did not provide quarterly figures. Reuters calculated the net profit figure from previous financial statement.
The quarterly earnings missed estimates by analysts at Arqaam Capital and SICO Bahrain who had expected a profit of 323 million dirhams and 572.5 million dirhams respectively in a Reuters poll.
Aldar was one of the worst hit by the real estate market collapse in Abu Dhabi and was rescued with an aid of over $10 billion from the government. In return, land on Al Raha beach, the Ferrari World Theme Park, and other key assets, were sold to the government.
The merger between the two entities was seen as a measure to boost the emirate's battered property sector where prices have dropped over 50 percent since its peak in 2008.
Net profit for 2012 was 1.3 billion dirhams, doubling from 642.5 million dirhams posted in the prior year period, Aldar said in a statement on the Abu Dhabi bourse.
Revenue for the year also nearly doubled to 11.4 billion dirhams from 6.7 billion dirhams a year ago.
The company said it had adjusted the value of its certain assets to reflect current market conditions and reassessed recoverable amounts. It thereby booked 1.1 billion dirhams on provisions for impairments, write offs and fair value loss on investment properties in 2012, much lesser than the 3 billion dirhams booked in 2011.
Shareholders of Aldar will vote on the proposed merger of the property firms on Feb 21. Under the merger proposal, Sorouh shareholders will get 1.288 Aldar shares for every share they own.
Another 15,000 units are expected to enter Abu Dhabi's already oversupplied real estate market this year, property consultancy CBRE has said.-Reuters