Abu Dhabi: Aldar Properties, the Abu Dhabi-based real estate developer, reported on Tuesday Dh601 million in net profits for the second quarter of this year, marking an 18 per cent increase from the Dh509 million in the same period last year.
The developer attributed the rise to a growth in recurring revenues, higher development margins and lower finance costs following significant refinancing efforts over the past two years.
Revenues, however, fell to Dh1.1 billion in the quarter compared to Dh2.1 billion during the same period last year after Aldar’s decision to adopt the IFRS 15 revenue recognition accounting policy.
The decision, which came in July 2015, impacts how the company recognizes revenue for off-plan development projects, which will now be predominantly accounted for over time.
“We remain on track to meet our target level of debt, and have paid off a further Dh1.1 billion during the quarter. Positive interest in our new developments – Nareel, Al Merief and Meera – demonstrates that we are bringing the right products to market at the right time,” said Mohammed Al Mubarak, chief executive officer of Aldar.
The Dh1.1 billion payment reduced the company’s gross debt further to Dh7.1 billion.
The CEO added that their strategy "remains unchanged". "We continue to grow our recurring revenues, strengthen our balance sheet, and monetise our land bank through implementing a clear and well defined development plan.”
As of Tuesday, 12 noon, Aldar’s shares, which are traded on the Abu Dhabi Securities Exchange, stood at Dh2.61 – down 2.25 per cent.
