Aldar's first-quarter profit jumps 22% on higher revenue

Net profit in the three-month period to the end of March increased to $228 million

Aldar reported record quarterly development sales of Dh4.5 billion, supported by increased demand from overseas and foreign resident buyers in the UAE. Delores Johnson / The National

Aldar Properties, Abu Dhabi’s biggest listed developer, reported a 22 per cent surge in its first-quarter profit as revenue increased on the back of strong growth in property sales.

Net profit for the three months to the end of March climbed to Dh836 million ($228 million), from the same period last year, Aldar said in a filing to the Abu Dhabi Securities Exchange, where its shares are traded.

Revenue and rental income for the period increased by 14 per cent annually to about Dh3.1 billion.

The company reported record quarterly development sales of Dh4.5 billion, supported by increased demand from overseas buyers and UAE residents.

“Aldar has maintained positive momentum in the first quarter of 2023, reporting a strong set of results against the backdrop of positive economic fundamentals in the UAE,” its group chief executive Talal Al Dhiyebi said.

“During the first quarter, we launched a variety of new residential concepts in Abu Dhabi that proved incredibly popular amongst investors locally and overseas. The success of these launches paved the way for our highest ever quarterly sales … and played a large part in Aldar’s stellar performance during the first three months of the year.”

The UAE economy rebounded strongly from the coronavirus-induced slowdown on the back of government initiatives, higher oil prices, a strong performance in its property sector and a rebound in travel and tourism.

After growing by 7.6 per cent last year, the highest in 11 years, the UAE economy is expected to expand by 3.9 per cent this year and 4.3 per cent in 2024, the Central Bank said in March.

“As the UAE continues to broaden its appeal as a business and lifestyle destination, we expect robust real estate market dynamics to sustain through 2023,” Mr Al Dhiyebi said.

“Against this backdrop, Aldar will continue to deploy capital in a disciplined manner across its platforms to drive our transformational growth agenda.”

The company has Dh6.1 billion of free cash and Dh4.4 billion of committed undrawn facilities to capture attractive growth opportunities, it said on Wednesday.

Aldar is looking to develop new commercial assets on Al Maryah Island in Abu Dhabi and expand its property portfolio.

In March, the company signed an agreement with Abu Dhabi's sovereign wealth fund Mubadala Investment Company to jointly develop commercial assets within the capital's international financial centre, the Abu Dhabi Global Market.

Aldar also plans to develop three new communities in Dubai through a joint venture with Dubai Holding. The deal marks Aldar’s entry into Dubai’s property sector, as part of the company’s broader expansion into new markets.

"We continue seeing similar momentum going forward in terms of growth," Aldar's acting chief finance and sustainability officer Faisal Falaknaz told the media.

"The acquisitions that we did last year are going to continue trickling in and coming into the following quarters and then on the development side, we are going to continue ramping up executing on our backlog."

Last year, Aldar made a number of new deals including the acquisition of Al Maryah Tower in the UAE capital for Dh450 million in partnership with Mubadala.

It also agreed to buy four prime commercial towers from Mubadala at The Abu Dhabi Global Market in a $1.17 billion deal.

In Ras Al Khaimah, it announced new deals including the acquisition of the DoubleTree Marjan Island, as well as an adjacent beachfront development plot for Dh810 million.

Overseas and UAE resident buyers represented about 45 per cent of its first quarter customer base with Dh1.9 billion in sales, Mr Falaknaz said.

The company aims to expand in Saudi Arabia and is looking at “all asset classes” as part of its growth strategy, he said.

The developer is also working on expanding its land bank in several areas across Egypt, including west Cairo, east Cairo and the North Coast, Aldar said in a separate statement to the ADX on Wednesday.

In 2021, Aldar led one of the largest foreign direct investments into the Egyptian real estate sector with the acquisition of developer Sodic.

Following the acquisition, Sodic achieved 21.3 billion Egyptian pounds ($690 million) in development sales in 2022, representing 87 per cent year-on-year growth.

"That performance has spilt over to 2023, with 3.1 billion pounds recorded in sales and reservations in [the first quarter of] 2023, which shows the resilience and attractiveness of the real estate market in Egypt," Aldar said.

Sodic also has a revenue backlog of almost 35 billion pounds.

Aldar said it was committed to "being a long-term strategic investor in the country".