Aldar Properties PJSC, Abu Dhabi's leading listed property development, investment and management company, today announced net profit of AED 2.25 billion for the year to 31 December 2013, an increase of 67% from 2012. Revenues for the full year totalled AED 5.38 billion.
Fourth-quarter net profit totalled AED 427 million, a rise of 79% from the same period in 2012.
The growth in net profit for the year was primarily driven by the impact of the acquisition of Sorouh as well as ongoing handovers of units at key residential developments, sales of residential units, the handover of infrastructure as part of a transaction with the Abu Dhabi government announced in 2013, and higher recurring revenues from the Company's hospitality and investment property portfolio.
Aldar Properties recorded a one-off gain on the acquisition of the net assets of Sorouh Real Estate following the merger between the two companies.
Commenting on the results, H.E. Abubaker Seddiq Al Khoori, Chairman of Aldar Properties, said:
"We have moved quickly to build a platform for sustainable growth having completed our merger integration earlier than planned. We have strengthened our financial position, enhanced our capital structure and made progress balancing our business between development and recurring revenues.
"We are seeing strong growth in the Abu Dhabi economy and Aldar will continue to play an integral role building communities and attractions that meet the lifestyle demands of both residents and visitors alike. We are currently working on new development projects from our extensive land bank that will lead us into a new phase of profit growth that will drive shareholder value."
Recurring revenue increases
Recurring revenue grew 27% to AED 1.83 billion over 2013, largely due to the combination of Aldar and Sorouh investment properties on merger.
Residential leasing activity picked up strongly at the end of 2013 at newly completed projects, including the Gate Towers and al rayyana, while the Company's residential portfolio comprising leased assets at Sas Al Nakhl, Khalidiya Village, Al Raha Beach, Sun and Sky and Al Murjan Tower were almost fully leased.
Yas Mall, which is scheduled to open in November 2014, is set to transform the retail landscape in Abu Dhabi with the largest Debenhams in the MENA region, the first Cheesecake Factory in Abu Dhabi, PF Changs, VOX Cinemas, Fun Works, Geant Hypermarket and others.
Revenues from the hospitality portfolio, which includes seven hotels on Abu Dhabi's Yas Island and now the Tilal Liwa Hotel in the Western region of the emirate, increased 21% to AED 504 million.
Full Year occupancy rates on hotels increased to 77% in 2013, from 65% in 2012.
Project completions drive development revenue
Real Estate development revenues were driven by the completion of key projects, in particular the Gate Towers, where 199 units were handed over during Q4 2013, as well as our ongoing programme of land and infrastructure deliveries to the Government.
Aldar also substantially completed several National Housing projects, which generate revenue for Aldar, including Al Sila'a in the Western Region, Al Ghuraibah in Al Ain, and Al Watani, Al Raha Gardens and Al Falah in Abu Dhabi. Our project management fee based pipeline is set to develop further with an increase in activity at Abu Dhabi Plaza in Astana, Kazakhstan that we are developing on behalf of the Government of Abu Dhabi as well as the Zone K residential project on Yas Island.
As of 31 December 2013, total assets were AED 43.7 billion and gearing (net debt to equity) was 58%, compared to 144% a year earlier. Aldar continues to maintain a strong cash position with AED 8.3 billion of cash and available liquidity at the end of the year.
Aldar has been focussed on reducing the cost of borrowing, extending its maturity profile and lowering its leverage levels post the completion of the merger with Sorouh. During the fourth quarter, Aldar raised $750 million via a landmark five-year Sukuk. The transaction was priced very competitively at a fixed profit rate of 4.348% and proceeds were used to repay debt and extend the company's debt maturity profile.
The successful Sukuk issuance followed significant ratings upgrades, with Moody's raising its long-term debt rating by four notches during 2013 to Ba1, with a positive outlook, and Standard and Poor's upgrading Aldar by two notches to BB.
Since the end of 2013, Aldar has repaid a further AED 2.25 billion of debt upon receipt of AED 3.5 billion in contractual payments from the Government of Abu Dhabi.
Merger integration completed
Following completion of the merger between Aldar Properties and Sorouh Real Estate, the two businesses are now fully integrated. Systems and processes are now aligned and all re-branding activity has been completed.
The company is well on track to exceed it's per annum synergy estimate of AED 90-110 million.
• The Gate Towers on Al Reem Island has received building completion certificates. Handover of units has begun at the 3,533-unit development.
• The handover of Tala Tower to owners is substantially complete, with over 364 out of the 375 (97%) residential units successfully handed over.
• The al rayyana development was completed in 2013, and leasing activity began in the fourth quarter with approximately 36% of the development now leased.
• The first phase of the 2,130-unit alghadeer development in the eastern region of Abu Dhabi is now being handed over to owners.
• Aldar completed construction of Repton School on Reem Island and the school opened in September 2013.
• The National Housing projects at Al Sila'a in the Western Region, Al Ghuraibah in Al Ain, as well as Al Watani, Al Falah and Raha Gardens in Abu Dhabi have been substantially completed and have received building completion certificates.
• Aldar is planning a number of new developments, including up to 1,000 units on Abu Dhabi Island, Yas Island and Al Raha Beach which will be developed in a phased approach and launching in first half of 2014 in line with market demand.
The construction of Yas Mall, Aldar's flagship retail development on Yas Island is now substantially complete and the mall is scheduled to open in late 2014 to coincide with the Abu Dhabi Grand Prix. Over 80% of the 2.5 million sq ft mall space is committed to major retail partners and the handover of units to tenants for fit-out has begun.
• A 25 year agreement authorising Aldar to operate World Trade Centre Abu Dhabi has been signed with the Government of Abu Dhabi. The Mall opened during October 2013, with the region's first House of Fraser department store as its anchor tenant. In addition, the commercial tower has been let on a 10-year term.
Our commercial portfolio is 82% leased
The portfolio was strengthened in 2013 with delivery of units at al rayyana and the Gate Towers.
? At al rayyana, tenants have already begun to move into the development and it is now 36% leased and we are seeing significant interest for bulk leases at the development.
? Leasing activity at the Gate Towers commenced in the fourth quarter of 2013. Following significant demand, 200 units have been leased or sold as of February 6, 2014.
• Full Year occupancy rates at the hotels on Abu Dhabi'sYas Island and the Tilal Liwa Hotel in the Western region of the emirate increased to 77% in 2013 from 65% in 2012.
• The six schools in Abu Dhabi and one in Al Ain have performed well and have grown student numbers by 20% to a total of 4,284 of students in 2013.;
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