Aldar Q3 2020 Revenue up 30% To Dh2.1 Billion and Net Profit up 8% To Dh416 Million Driven by Record Quarter for Development Business
Aldar Properties PSJC (“Aldar”), the largest listed real estate company in the United Arab Emirates (UAE) by market capitalization, today reported a 30% year on year increase in revenue to AED 2.1 billion. Gross profit was up 5% to AED 696 million and net profit rose 8% to AED 416 million, driven by record quarterly home sales in its core market, Abu Dhabi.
Aldar produced a 7% year-on-year increase in development sales to a record AED 1.2 billion for the third quarter. This brought year to date total sales to AED 2.0 billion, with prime Abu Dhabi destinations of Saadiyat Island and Yas Island continuing to attract investors and end-users.
The Abu Dhabi real estate market has held firm this year despite the challenging global macro-economic environment, supported by incentives for home buyers, measured supply of new units, and government programmes to promote private sector growth. Collections from units being handed over and projects under development were also very strong, with AED 3.1 billion collected year to date.
Aldar’s large portfolio of investment properties has displayed a high degree of stability despite the difficult operating environment due to Covid-19, with average occupancy across the diversified retail, commercial and residential assets standing at 87%. The Company also continued to earn steady income from its third-party development management business, which is set to expand further following a new mandate granted in late October (post Q3 reporting period) to take over the development and management of over AED 30 billion of Abu Dhabi Government capital projects.
Talal Al Dhiyebi, Chief Executive Officer of Aldar said, “The strength of Aldar’s business continues to be demonstrated in this challenging year, with our highly diversified business model delivering strong earnings.
The company benefits from two core businesses, comprising a large and diverse, actively managed income-generating investment portfolio and a development business of premier destinations. These provide strong cash flows, revenue visibility as well as meaningful revenue and profit growth.
Given the company’s balance sheet strength and robust cash position, Aldar continues to actively pursue opportunities to invest in both our development pipeline and in expanding our investment portfolio.
Strong sales at our prime developments reflects sustained investor confidence in Abu Dhabi’s real estate fundamentals, which are supported by the Government’s commitment to implement its economic growth and diversification strategy. Aldar is proud to be partnering with the Abu Dhabi Government as it invests further in strategic capital projects.”
Business and financial update
Aldar’s Development Management business recorded revenues of AED 1.29 billion in the third quarter of 2020, more than double the same period in the previous year. This exceptional growth was driven by strong sales of completed residential units, income recorded from continued progress on delivery of projects under development and income for managing Abu Dhabi Government projects.
Aldar has experienced strong demand for its high-quality residential units at the Water’s Edge, Mamsha and Nareel Island developments. By introducing digital solutions and virtual tours, the company has achieved continuity in sales in 2020 despite the temporary lockdown due to Covid-19 earlier in the year.
The Asset Management business recorded net operating income (NOI) of AED 383 million, just 3.5% lower year on year, demonstrating the benefits of a well-diversified portfolio in the current exceptional circumstances.
The impact from Covid-19 measures on hospitality and retail assets has been offset by a stable commercial and residential property portfolio, and a 5% year on year increase in gross profit at Aldar’s Adjacent Business segment, which includes Aldar Education, property management firm Provis and facilities management company Khidmah.
Aldar maintained its healthy balance sheet position, with AED 2.5 billion of free cash and AED 4.0 billion of undrawn, committed credit facilities as at 30 September 2020, supported by AED 3.1 billion of development sales collections during the year to date.
Update on AED 190 million Covid-19 targeted support programmes
Aldar launched targeted programmes in March 2020 to support tenants, homebuyers and the wider community to minimize the impact of Covid-19.
Since launching the programmes, Aldar has granted a 20% discount applied to nearly 7,500 students at its schools, invested approximately AED 10 million in technology including provision of laptops and distance learning education platform and Aldar Academies has established a AED 6 million hardship fund to support parents in these challenging times.
Aldar has allocated AED 60 million to support residential buyers and tenants through market-beating home finance products, rent-to-own units, monthly rental payment plans and convenient rental payment options. Over 330 residential buyers have taken advantage of the subsidized mortgage offer, supporting unit purchases in excess of AED 1 billion.
The company also launched a series of initiatives to support retail partners, reaching over AED 90 million which has helped businesses continue to operate through difficult circumstances.
Aldar Properties PJSC, is the leading real estate developer in Abu Dhabi, and through its iconic developments, it is one of the most well known in the United Arab Emirates, and wider Middle East region.
From its beginnings in 2005 through to today, Aldar continues to shape and enhance the urban fabric of the UAE’s Capital City in addition to other key areas of the Emirate of Abu Dhabi.