Abu Dhabi-based Aldar Properties, one of the largest developers in the Middle East and North Africa (Mena), has posted a net profit of Dh601 million ($163.5 million) for the second quarter (Q2) of the year, up 18 per cent from Dh509 million ($138.6 million) of Q2 2014.

This was a result of the growth in recurring revenues, higher development margins and lower finance costs following significant refinancing and deleveraging efforts over the last 24 months.

Revenues for the second quarter 2015 were Dh1.106 billion compared to Dh2.194 billion in the second quarter 2014. Q2 2015 gross profit margin was 45 per cent, up from 15 per cent in the second quarter of 2014.  Development revenues were Dh318 million during the quarter.

Gross profit from recurring revenue assets grew 60 per cent in Q2 2015 to Dh340 million from Dh213 million driven by the contribution of the fully leased and occupied residential portfolio at The Gate Towers and Al Rayyana; and revenues from Yas Mall.

Gross debt reduced by Dh1.1 billion to Dh7.1 billion, down from Dh8.2 billion as at March 31.

“Aldar had a strong second quarter driven by the continued growth and stabilisation of our recurring revenue asset portfolio.  This has resulted in an improvement in the underlying quality of earnings,” said Mohammed Al Mubarak, Aldar Properties CEO.

“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.

“Our 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,” he added.

The expanded recurring revenue asset base which includes retail, residential, office and hotel assets grew significantly quarter-on-quarter.  This was driven by the growth in the residential portfolio, following the leasing of over 3,000 units at The Gate Towers and Al Rayyana as well as the trading progress at Yas Mall.  

During the quarter, Aldar repaid a further Dh1.1 billion of loans from excess cash in the business, reducing gross debt further to Dh7.1 billion.

Aldar’s cash position marginally increased to Dh5.3 billion of cash as at the end of the second quarter 2015 following the receipt of Dh1.2 billion in government infrastructure receivables, offset by the debt repayments mentioned above.  – TradeArabia News Service