Land sale pushes up Amlak first-quarter profit

Amlak reported surging profit despite a decline in its financing business, after booking proceeds from a land sale.

The Sharia-compliant home finance company reported a net profit of Dh123 million for the first quarter this year, compared with a profit of Dh6.1m in the same period last year.

Revenue increased by 25 per cent to Dh363m, up from Dh104m a year earlier.

While revenue from its core financing business fell by 29 per cent to Dh56.7m, compared to Dh79.9m in the first quarter last year, it declared a gain of Dh280m from the sale of real estate – land held through a joint venture known as Al Warqa Gardens that sold a number of plots in Nad Al Hammar.

Accounts show that the company incurred Dh130m in costs relating to the sale, which is understood to be money that has been spent developing infrastructure at the site. Amlak Finance did not earn any money from property sales in the same period last year.

Its balance sheet was strengthened by retained profits, increasing in value by 5 per cent quarter-on-quarter to Dh1.67 billion by the end of March.

Its operating costs also fell by 12 per cent to Dh30m, and financing costs by 11 per cent to Dh32m. Amlak Finance attributed the former to better cost management and the latter to repayments to its lenders.

“I am pleased that our strategy and efforts to develop the infrastructure of the Nad Al Hamar land project have been successful, allowing us to realise substantial revenue,” said Arif Alharmi, the managing director of Amlak. “The income generated is a result of project progress and sales of 48 per cent of the land plots, of which most have been transferred to the buyers.”

He said that he expects Amlak Finance to achieve “modest growth” for the rest of the year.

Following the publication of its first-quarter results, shares in Amlak Finance climbed in value by 3.5 per cent by midday yesterday, up by 5 fils to Dh1.50.

Dubai-based developer Emaar Properties holds a 45 per cent stake in Amlak Finance.

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Michael Fahy

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