Aldar profit climbs as property backlog converts

Aldar Properties recorded an 18% rise in first-half net profit after tax to AED 4.9 billion, as the Abu Dhabi developer converted its substantial project backlog into revenue and expanded income from investment properties.

Revenue increased 8% year on year to AED 16.8 billion during the six months ended June, while gross profit rose 17% to AED 6.2 billion. Earnings before interest, tax, depreciation and amortisation advanced 19% to AED 6.3 billion. Earnings per share grew 17% to AED 0.53.

Second-quarter net profit after tax rose 17% to AED 2.6 billion. Quarterly revenue increased 5% to AED 8.1 billion, while gross profit climbed 14% to AED 2.9 billion. EBITDA rose 18% to AED 3.3 billion, supported by improved margins and recurring income.

The company’s development division remained the largest earnings contributor. First-half revenue from Aldar Development increased 10% to AED 12.4 billion, while EBITDA rose 21% to AED 4 billion. Revenue recognition from homes sold in earlier periods helped offset a sharp fall in new sales.

Group development sales declined 34% to AED 12.1 billion during the first half. Second-quarter sales fell 43% to AED 5.4 billion. UAE sales dropped 46% to AED 9.4 billion for the six-month period, reflecting fewer project launches and a more measured approach to releasing inventory amid changing market conditions.

Aldar launched Yas Park Place, Al Ghadeer Gardens and The Orchids at Yas Acres during the second quarter. The developments target family buyers and the mid-priced housing segment, where demand has remained supported by population growth and employment creation across Abu Dhabi.

Despite slower sales, the development revenue backlog stood at AED 71.6 billion at the end of June. The UAE accounted for AED 59.9 billion of that amount, with an average recognition period of 29 months. The pipeline gives the company visibility over revenue expected to be booked during the next two to three years.

Overseas and expatriate residents purchased AED 7.6 billion of Aldar’s UAE properties during the half, representing 80% of domestic sales. The figure underlined Abu Dhabi’s growing appeal among international investors seeking residential assets, long-term residency options and exposure to the emirate’s economic expansion.

International operations partly cushioned the slowdown in UAE sales. Egypt-based SODIC recorded a 171% increase in first-half sales to AED 1.4 billion. London Square, Aldar’s UK development business, posted a 236% rise to AED 1.2 billion following launches at Bermondsey, Wimbledon Bridge House and Ransome’s Wharf.

Recurring income also strengthened the group’s performance. Aldar Investment’s first-half revenue rose 12% to AED 4.2 billion, while adjusted EBITDA increased 18% to AED 1.8 billion. High occupancy, rental growth and acquisitions across commercial, residential and logistics properties supported the division.

Investment-property adjusted EBITDA increased 30% to AED 1.3 billion, with portfolio occupancy at 95%. Commercial assets were 99% occupied, while residential occupancy stood at 96%. Retail adjusted EBITDA surged 68% to AED 463 million, helped by contributions from The Galleria Luxury Collection and continued demand at Yas Mall.

Industrial and logistics adjusted EBITDA climbed 173% to AED 95 million. Expansion was supported by assets at Al Markaz and Khalifa Economic Zones Abu Dhabi, where Aldar completed the AED 650 million purchase of a logistics portfolio from AD Ports Group. The transaction added 163,000 square metres of gross leasable area.

Hospitality remained a weaker part of the portfolio. First-half adjusted EBITDA from hotels and leisure assets fell 18% to AED 140 million. Occupancy declined to 54% from 70%, while revenue per available room dropped 7% to AED 430. Average daily rates, however, rose 21% to AED 800.

Assets under management reached AED 56 billion, while Aldar’s develop-to-hold pipeline expanded to AED 20 billion. The company added five projects during the second quarter, including a AED 2.8 billion partnership to develop 9,000 rental homes and a AED 1.1 billion residential and retail scheme in Dubai Studio City.

Available liquidity stood at AED 37.1 billion at the end of June, comprising AED 16.8 billion in unrestricted cash and AED 20.3 billion in undrawn committed banking facilities. Aldar also closed a AED 5 billion sustainability-linked revolving credit facility during the half.