Aldar Properties, Abu Dhabi's flagship developer, yesterday revealed it made a net profit of Dh642.5 million (US$174.9m) last year, reversing a loss of Dh12.6bn in 2010.
Revenue last year was buoyed by sales of land and property to the Government, increasing overall to Dh6.74 billion from Dh1.79bn in the previous year.
"In 2011, Aldar delivered major milestones from its development activities. We also undertook a number of financial initiatives to return Aldar to long-term growth and ensure ongoing value creation for all our stakeholders," said Ali Eid AlMheiri, the chairman. The company also announced it would pay a dividend to shareholders.
"We are a more efficient organisation that is well positioned to capitalise on market opportunities and drive shareholders' returns by deploying capital selectively into key projects," he said.
The results led to earnings per share of 15 fils compared with a loss per share of Dh4.39 for the previous year and prompted management to pay a dividend of 5 fils per share. Revenue from land sales, completed properties and project management was Dh5.4bn, while revenue from investment properties, hotels and schools was up 48 per cent to Dh1.3bn.
The developer said it had written down a number of assets to reflect prevailing market conditions, with Dh3bn in impairments, provisions and fair-value losses recognised overall last year.
During the year, Aldar completed 1,930 residential units including Al Zeina and Al Muneera communities at Al Raha Beach.
The developer added 76,000 square metres of retail space, including the Ikea development on Yas Island, the Gardens Plaza and Motor World.
Aldar has been helped by the Abu Dhabi Government in the past 12 months after its assets were hit hard during the property market downturn. It is in the process of selling some of its assets to the Government for Dh16.8bn.
The deal includes the Government paying Dh5.7bn for Central Market, the city centre souq designed by Norman Foster, and taking on the estimated completion cost of Dh2.6bn.
In January last year, the company also announced a funding plan under which the Abu Dhabi Government would buy Dh10.9bn of the company's Yas Island infrastructure assets, including the Ferrari World theme park and Dh5.5bn of residential units and land.
The company issued a Dh2.8bn convertible bond to Mubadala Development, a strategic investment company owned by the Abu Dhabi Government, and in October laid off 105 employees, about 25 per cent of its staff.
Aldar's stock movement has reflected a tumultuous past 18 months and now trades at 99 fils. The stock has gained 7.6 per cent this year but is still a long way from its peak of more than Dh13 in June 2008.
Net assets increased last year by 67 per cent to Dh7bn, against Dh4.2bn in the previous year, on the back of greater profits and the conversion of the convertible bond issued to Mubadala.
rjones@thenational.ae
Key changes
Commission caps
For life insurance products with a savings component, Peter Hodgins of Clyde & Co said different caps apply to the saving and protection elements:
• For the saving component, a cap of 4.5 per cent of the annualised premium per year (which may not exceed 90 per cent of the annualised premium over the policy term).
• On the protection component, there is a cap of 10 per cent of the annualised premium per year (which may not exceed 160 per cent of the annualised premium over the policy term).
• Indemnity commission, the amount of commission that can be advanced to a product salesperson, can be 50 per cent of the annualised premium for the first year or 50 per cent of the total commissions on the policy calculated.
• The remaining commission after deduction of the indemnity commission is paid equally over the premium payment term.
• For pure protection products, which only offer a life insurance component, the maximum commission will be 10 per cent of the annualised premium multiplied by the length of the policy in years.
Disclosure
Customers must now be provided with a full illustration of the product they are buying to ensure they understand the potential returns on savings products as well as the effects of any charges. There is also a “free-look” period of 30 days, where insurers must provide a full refund if the buyer wishes to cancel the policy.
“The illustration should provide for at least two scenarios to illustrate the performance of the product,” said Mr Hodgins. “All illustrations are required to be signed by the customer.”
Another illustration must outline surrender charges to ensure they understand the costs of exiting a fixed-term product early.
Illustrations must also be kept updatedand insurers must provide information on the top five investment funds available annually, including at least five years' performance data.
“This may be segregated based on the risk appetite of the customer (in which case, the top five funds for each segment must be provided),” said Mr Hodgins.
Product providers must also disclose the ratio of protection benefit to savings benefits. If a protection benefit ratio is less than 10 per cent "the product must carry a warning stating that it has limited or no protection benefit" Mr Hodgins added.
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
How to play the stock market recovery in 2021?
If you are looking to build your long-term wealth in 2021 and beyond, the stock market is still the best place to do it as equities powered on despite the pandemic.
Investing in individual stocks is not for everyone and most private investors should stick to mutual funds and ETFs, but there are some thrilling opportunities for those who understand the risks.
Peter Garnry, head of equity strategy at Saxo Bank, says the 20 best-performing US and European stocks have delivered an average return year-to-date of 148 per cent, measured in local currency terms.
Online marketplace Etsy was the best performer with a return of 330.6 per cent, followed by communications software company Sinch (315.4 per cent), online supermarket HelloFresh (232.8 per cent) and fuel cells specialist NEL (191.7 per cent).
Mr Garnry says digital companies benefited from the lockdown, while green energy firms flew as efforts to combat climate change were ramped up, helped in part by the European Union’s green deal.
Electric car company Tesla would be on the list if it had been part of the S&P 500 Index, but it only joined on December 21. “Tesla has become one of the most valuable companies in the world this year as demand for electric vehicles has grown dramatically,” Mr Garnry says.
By contrast, the 20 worst-performing European stocks fell 54 per cent on average, with European banks hit by the economic fallout from the pandemic, while cruise liners and airline stocks suffered due to travel restrictions.
As demand for energy fell, the oil and gas industry had a tough year, too.
Mr Garnry says the biggest story this year was the “absolute crunch” in so-called value stocks, companies that trade at low valuations compared to their earnings and growth potential.
He says they are “heavily tilted towards financials, miners, energy, utilities and industrials, which have all been hit hard by the Covid-19 pandemic”. “The last year saw these cheap stocks become cheaper and expensive stocks have become more expensive.”
This has triggered excited talk about the “great value rotation” but Mr Garnry remains sceptical. “We need to see a breakout of interest rates combined with higher inflation before we join the crowd.”
Always remember that past performance is not a guarantee of future returns. Last year’s winners often turn out to be this year’s losers, and vice-versa.
Results:
CSIL 2-star 145cm One Round with Jump-Off
1. Alice Debany Clero (USA) on Amareusa S 38.83 seconds
2. Anikka Sande (NOR) For Cash 2 39.09
3. Georgia Tame (GBR) Cash Up 39.42
4. Nadia Taryam (UAE) Askaria 3 39.63
5. Miriam Schneider (GER) Fidelius G 47.74
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
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Europe’s rearming plan
- Suspend strict budget rules to allow member countries to step up defence spending
- Create new "instrument" providing €150 billion of loans to member countries for defence investment
- Use the existing EU budget to direct more funds towards defence-related investment
- Engage the bloc's European Investment Bank to drop limits on lending to defence firms
- Create a savings and investments union to help companies access capital
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THE%20SWIMMERS
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