Abu Dhabi’s Aldar Says Mega-Mall Revenue Will Help Cut Debt In 2015

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 senior executive said on Thursday after it reported a 61 per cent jump in quarterly profit.

The state-linked builder’s net debt was Dhs9.2 billion ($2.50 billion) at the end of 2014, down by a third from a year earlier.

It paid off a further Dhs1 billion in January, Chief Financial Officer Greg Fewer told reporters on a conference call, adding Aldar expected to cut debt to Dhs6 billion by the end of 2015.

Aldar made a profit attributable to shareholders of Dhs696.3 million ($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 Dhs462.4 millions for the period and was ahead of the corresponding period of 2013, when net profit was Dhs432.6 million.

The firm’s fourth-quarter recurring revenue rose 19 per cent to Dhs701 million. 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 Dhs177.2 million on investment properties, up from a loss of Dhs27.6 million a year earlier, according to Reuters calculations.

Despite higher recurring revenue, overall revenue in the fourth quarter at the firm was slightly down to Dhs1.27 billion, Reuters calculations show.

Aldar’s profit was Dhs2.24 billion in 2014, almost flat compared with the Dhs2.25 billion in 2013.

Aldar proposed a dividend of Dhs0.09 per share for 2014, up from Dhs0.07 for 2013.

Abu Dhabi owes Aldar Dhs3.6 billion from historic asset sales and Dhs2.1 billion from infrastructure developments the company built on the government’s behalf.

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