Abu Dhabi’s Aldar says mega-mall revenue will help cut debt in 2015

The state-linked builder’s net debt was $2.50 billion at the end of 2014, down by a third from a year earlier

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Abu Dhabi’s Aldar Properties will further slash its debt this year as it nets higher-margin recurring revenue from a newly opened mega mall, a seniorexecutive said on Thursday after it reported a 61 percent jump in quarterly profit.

The state-linked builder’s net debt was 9.2 billion dirhams ($2.50 billion) at the end of 2014, down by a third from a year earlier.

It paid off a further 1 billion dirhams in January, Chief Financial Officer Greg Fewer told reporters on a conference call, adding Aldar expected to cut debt to 6 billion dirhams by the end of 2015.

Aldar made a profit attributable to shareholders of 696.3 million dirhams ($189.6 million) in the quarter ended Dec. 31, according to Reuters calculations based on a company statement.

This beat SICO Bahrain’s forecast of 462.4 millions dirhams for the period and was ahead of the corresponding period of 2013, when net profit was 432.6 million dirhams.

The firm’s fourth-quarter recurring revenue rose 19 percent to 701 million dirhams. In November, it opened the 2.5 million square-foot Yas Mall, which was fully leased by the end of 2014.


“The revenue mix has changed quite a bit - our earnings now principally comprise rental streams which are high quality in terms of profit margins and continuity,” said Fewer.

“In 2013 we handed over a lot of units. (We’re) now seeing rental assets grow and take over from development assets. Q4 results included just a month’s trading at Yas Mall. The real impact on recurring revenue should flow through in 2015.”

It also made a fourth-quarter fair value gain of 177.2 million dirhams on investment properties, up from a loss of 27.6 million dirhams a year earlier, according to Reuters calculations.

Despite higher recurring revenue, overall revenue in the fourth quarter at the firm was slightly down to 1.27 billion dirhams, Reuters calculations show.

Aldar’s profit was 2.24 billion dirhams in 2014, almost flat compared with the 2.25 billion dirhams in 2013.

Aldar proposed a dividend of 0.09 dirhams per share for 2014, up from 0.07 dirhams for 2013.

Abu Dhabi owes Aldar 3.6 billion dirhams from historic asset sales and 2.1 billion dirhams from infrastructure developments the company built on the government's behalf.

Shares in Aldar, 30 percent owned by state investment fund Mubadala Development Co, traded flat at 0642 GMT, in line with the wider Abu Dhabi market.

($1 = 3.6730 UAE dirhams)

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