Abu Dhabi / Emirates Business
Aldar Properties PJSC (â€œthe Companyâ€), Abu Dhabi’s leading listed property development, investment and management company, on Monday announced net profit of AED 2.6 billion for the financial year ended 31 December 2015, up 13% from AED 2.3 billion in 2014. Net profit for the fourth quarter rose 4% to AED 750 million, from AED 718 million in Q4 2014.
The Company proposed a 10 fils per share dividend for 2015, up from 9 fils per share in 2014. The Board has also formalised a progressive policy for dividend recommendations from 2016 onwards, underlining the companyâ€™s commitment to returning capital to shareholders.
H.E. Mohamed Al Mubarak, CEO of Aldar Properties, said: â€œ2015 was another successful year for Aldar with development sales of AED 3 billion and gross profit from recurring revenue up by 49%. Our focus on stabilising recurring revenue assets has significantly improved the quality of our earnings and provided clarity on long-term cash flow.
â€œDelivering shareholder value remains a priority for Aldar. Our continued success has created a more stable and mature company. I am pleased to announce that our Board has proposed a 10 fils per share dividend for 2015. We also believe now is the appropriate time to formalise a progressive dividend policy that reflects the underlying profitability and cash flow of the business.
â€œOur business remains underpinned by a healthy balance sheet, stable operating environment, and strong fundamentals. Consistency in delivering growth from a high quality portfolio of assets and a strong pipeline of developments gives me great confidence in Aldarâ€™s future.â€
The Board of Directors recommends a cash dividend of 10 fils per share for 2015, up 11% from 9 fils in 2014.
With a stabilised asset base and higher quality of earnings, the Board has concluded that now is the right time to formalise a progressive policy for dividend recommendations, linked to the underlying cash flow performance of the business.
With effect from financial year 2016, the Companyâ€™s dividend policy will be to recommend returns to shareholders, in the form of annual dividends, of between 65% to 80% of distributable free cash flow from the investment properties and 100% owned operating companies. This will be supplemented by a discretionary percentage of the total realised cash profits on the completion of development projects.
Recurring Revenue Growth
In the fourth quarter, gross profit from recurring revenues increased by 35% to AED 447 million versus AED 332 million in the same period of 2014. Full-year gross profit from recurring revenues rose 49% to AED 1.5 billion in 2015, underpinned by the stabilisation of key assets including Yas Mall, as well as an overall improvement in the operational performance across all asset classes.
In addition to underpinning a progressive dividend policy, Aldarâ€™s stabilised asset base gives the Company confidence in targeting net operating income from recurring revenue assets of AED 2.2 billion by 2020, representing growth of 40%. As previously announced, this will be supported by an investment programme of AED 3 billion, of which 30% has already been committed to date.
In 2015, a greater proportion of revenue was derived from recurring revenue assets, whereas in 2014 the primary driver of revenues was development handovers. This change in revenue mix explains the reduction of 30% in overall revenues in 2015.
Robust Capital Structure
During 2015, Aldar continued to strengthen its balance sheet through the collection of receivables and further deleveraging, providing a solid platform for future growth. Debt stood at AED 6.0 billion as at 31 December 2015, down from AED 9.1 billion as at the end of 2014, in line with the Companyâ€™s policy for debt to be between 35-40% of the value of the investment properties and operating businesses.
â€¢ Yas Mall has reached a stabilised trading occupancy, delivering a high quality shopping experience through a wide variety of household brands such as Apple, Nike, Zara, Debenhams and Adventure HQ.
â€¢ Since opening, Yas Mall has attracted over 20 million visitors.
â€¢ The residential portfolio is fully leased with continued demand for Aldar products.
â€¢ Hotel portfolio occupancy was in line with 2014 and continues to outperform the wider Abu Dhabi market.
â€¢ Four residential projects successfully launched; three sold out, one ongoing.
â€¢ AED 3 billion development sales in 2015 across over 900 units.