DUBAI: Abu Dhabi’s biggest developer, Aldar Properties plans to speed development activity across its markets and is optimistic about prospects in Egypt, it said on Monday after posting a jump in first-quarter net profit.
Net profit leaped 88% from a year earlier to 1.57 billion UAE dirhams ($427.5 million), beating analyst expectations of 1.03 billion dirhams, LSEG data showed.
The growth was driven by “robust macroeconomic fundamentals and consumer confidence in the UAE”, Chief Financial and Sustainability Officer Faisal Falaknaz said.
“Looking ahead, we plan to accelerate development activity in Abu Dhabi, Dubai, Ras al-Khaimah, Egypt, and the UK this year to drive further scale”, he told reporters in a post-earnings call.
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Aldar is 25%-owned by sovereign wealth fund Mubadala and 26%-owned by International Holding Company, which is part of a business empire overseen by Sheikh Tahnoon bin Zayed al-Nahyan, the UAE’s national security adviser and brother to the president.
In 2021, it acquired about 85.5% of The Sixth of October for Development and Investment (SODIC) shares along with Abu Dhabi fund ADQ to expand the company’s real estate portfolio in Egypt.
Asked about business in Egypt and the recent devaluation of the local currency there, Falaknaz said the firm’s backlog in the country stood north of 3.5 billion dirhams, and remained “strongly profitable due to the efforts from the management team there to hedge both from the revenue and cost side.”
Egypt last month allowed its currency to weaken as part of an $8 billion IMF support package, with the devaluation prompting foreign investors to pour billions of dollars into local treasuries and Egyptians expatriates to send more money home.
“We remain extremely optimistic for the long-term prospects of that market”, which were “validated by the recent acquisition by ADQ into Ras Al-Hikma development”, he said, pointing to the $35 billion investment partnership deal between Egypt and the UAE signed in February to develop a peninsula west of Alexandria - one of the biggest deals of its kind.
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Aldar said on Monday that its revenue for the quarter totalled 5.6 billion dirhams, up 83% year on year, driven by growth across the firm’s core businesses, including the development segment.
It said in February that it would invest 5 billion dirhams to build new office, retail and hospitality facilities in the state by 2027, including the expanding UAE capital city’s financial district.
Abu Dhabi’s financial district plans a tenfold expansion by adding al-Reem Island to its current location on al-Maryah Island, Reuters reported in September.
Abu Dhabi is home to three sovereign wealth funds, Abu Dhabi Investment Authority, Mubadala Investment Company and ADQ and is quickly becoming a hub for hedge funds, family offices, venture capital firms and crypto traders.