Aldar profits up 77%

Aldar Properties, the largest developer in Abu Dhabi, saw annual profits increase by 77.5 per cent last year, despite sales in the fourth quarter grinding to a halt.
Shafqat Malik, the Aldar chief financial officer, said the company decided in September to “basically stop selling” for the last three months of the year because of a dramatic change in market conditions.

“We did it intentionally because of the market state,” he said. “The thing is that you need to be alert and cautious in your approach to make sure you adjust yourself to market conditions.” Annual profit jumped 77.5 per cent to Dh3.4 billion (US$926 million), while earnings in the last quarter fell by 89 per cent to Dh84m.

Ahmed Ali al Sayegh, the chairman of Aldar, said last year was successful for the company but warned that this year would see the impact of the global credit crisis and slowdown in the domestic property sector.

“2009 will be a challenging year, but Aldar is well positioned to meet these challenges and we are responding to the current environment in a prudent and appropriate manner,” he said.

The company saw a modest rise in its share price in anticipation of the earnings report yesterday, increasing by Dh0.10, or 4.15 per cent, to Dh2.51. The company’s shares, along with others in the industry, have suffered from negative sentiment that started with the US mortgage crisis and spread across the globe. Aldar has lost 79.5 per cent of its share value since Jan 1 last year.

Unlike many developers in Dubai, Aldar has yet to announce changes in its payment plans or construction schedules.

But Aldar Laing O’Rourke, a joint venture with a UK construction company, said earlier this month that it was laying off between 200 and 250 skilled employees out of 1,900 to “realign” the company to the changing economic environment. It also said recently that it was looking to increase its rental holdings to guarantee income in the months ahead.

Last year there was a major evolution of the five-year-old company, with sales for most of its projects beginning for the first time and Abu Dhabi highlighted by investors as a rising property market.

Proof of this came in the figures. Net operating income was Dh2.2bn compared with Dh120.1m in 2007. Gross revenues last year rose 335.7 per cent to Dh5.34bn and net asset value increased by 108.5 per cent to Dh16.03bn. Employee numbers rose to about 800, from 378 in the year before.

bhope@thenational.ae Bradley Hope The National

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