Aldar sustains growth momentum with 15% rise in gross profit, as development sales surge to a record AED 2.35 bn

Group Financial Highlights

• Sustained growth momentum across Aldar’s diversified businesses, driven by another quarter of record development sales, increased fee income from management of third-party projects and stable recurring income generated by Aldar Investment
  
• Aldar leveraged its strong brand equity and capabilities in capturing market demand, recording highest ever quarterly development sales of AED 2.35 billion in Q2, bringing total sales in H1 to AED 3.4 billion and revenue backlog to AED 4.25 billion.
  
• All new project launches this year have sold out, providing clear visibility on future revenue as developments progress
  
• Aldar Development recorded 10% YoY increase in gross profit to AED 444 million on solid development revenues and higher management fee income, as government projects ramped up
  
• Aldar Investment reported 23% YoY increase  in recurring net operating income to AED 375 million driven by new leases and higher contributions from the property management and education businesses
  
• Strong liquidity position with AED 4.45 billion of unrestricted cash and AED 4.5 billion of undrawn committed facilities will fuel sustainable and long-term growth opportunities
  
• Operating environment continues to improve, supported by UAE’s world-leading vaccination rate as well as real estate, residency, investment reforms

This core business unit comprises two main segments: Property Development & Sales, which is responsible for developing, marketing, and selling Aldar’s diverse and strategic land bank located in key investment zones including Saadiyat and Yas Islands; and Project Management Services, which manages Aldar's fee-based development management business including AED 45 billion of government housing and infrastructure projects.

• Aldar Development revenue in Q2 increased 7% to AED 1.35 billion and gross profit jumped 10% to AED 444 million, predominantly driven by solid development revenue and higher contributions from the fee-based project management business.
  
• The Property Development & Sales business held firm, supported by a good pace of construction at developments, robust inventory sales and successful new project launches.
  
• Aldar recorded its highest ever quarterly sales at AED 2.35 billion in Q2, bringing the total to AED 3.4 billion for H1. New development launches, which will deliver income to Aldar across the project lifespan, were rapidly sold out: 669 villas across Noya Luma and Noya Viva. The business also reported a steady pace in sales of existing inventory at mid-to-high-end destinations, including Water’s Edge, Mamsha, Nareel, Yas Acres, Lea and Reeman 2. This strong momentum is expected to continue into Q3 driven by the successful sell-out of waterfront land plots at Al Gurm, and villas at Saadiyat Reserve The Dunes.
• The significant development sales in the period resulted in a 28% quarter-on-quarter increase in revenue backlog to AED 4.25 billion.
  
• Expatriate homeowners and foreign investors represent 42% of total buyers as they continue to realise the benefits of Abu Dhabi’s recently implemented real estate, residency, and investment reforms. In addition, Aldar witnessed strong demand from both first-time homeowners and return buyers who appreciate the quality of its properties within well-designed communities.
  
• Cash collections were up 36% YoY to AED 1.06 billion primarily driven by handover collections across Mamsha, Yas Acres, West Yas, Water’s Edge and Nareel.
  
• Revenue for the Project Management Services business increased 58% YoY to AED 366.7 million in Q2, and gross profit jumped 192% to AED 107.9 million. This growth was driven by strong progress made on a range of project management, fixed contracts, and third-party projects under Aldar’s management, including the projects awarded by the Abu Dhabi Government last year.
  
• Aldar is leading a consortium of investors that submitted a non-binding offer to acquire a majority stake in one of Egypt’s listed leading real estate development companies, Sixth of October Development and Investment Company. During Q2, the Company received an approval from the Egyptian Financial Regulatory Authority (FRA) for a 30-day deadline extension to finalise the due diligence process and relevant procedures.
  
  
  

Q2 Corporate Highlights

ESG: Further Embedding of Sustainability Across the Group

• Aldar signed a AED 300 million facility with HSBC that links the interest margin payable under the facility to achievement of sustainability targets. The facility, which is aligned with the Sustainability-Linked Loan Principles (SLLP), includes a mechanism to adjust Aldar’s interest margin annually in line with achievement of targets on energy and water intensity, waste recycling and worker welfare. This reinforces Aldar’s position as the highest ESG ranking listed real estate company in the UAE.
  
• During the second quarter, Aldar adopted the Task Force on Climate Related Financial Disclosures (TCFD) framework as part of its sustainability reporting and completed a business level climate risk assessment following the TCFD guidelines
  
• Aldar joined the United Nations Global Compact, the world’s largest corporate sustainability initiative.
  
• Sustainability became a core competency for Aldar’s employees during Q2, integrating into the company’s competency and performance management frameworks.
  

Innovation: Supporting, Nurturing and Investing in New Ideas and Tech

• Aldar selected twelve finalists for the second edition of its Manassah entrepreneurship programme – a six-month incubator aimed at nurturing talent and advancing retail concepts in the GCC.  Six tech start-ups and six traditional retail concepts are working with Aldar to develop their concepts and build up the skills needed to successfully operate and scale their start-ups.
  

Customer: Evolving and Enhancing Experience

• During Q2, Aldar started the process of centralizing its call centres to create a consistent customer experience across all of its assets. This includes all channels of customer communication including inbound, outbound, SMS, WhatsApp and email.
  
• Enhanced the customer sales journey by rolling out 3D interactive masterplans for key sales launches with high end visualizations to allow customers to select their preferred units.
  

People: Providing Meaningful Careers

• In line with Aldar’s Diversity and Inclusion strategy, the company continues to diversify its employee mix and culture. During Q2, Aldar welcomed 14 People of Determination to its internship programmes across the Group. The company also increased its overall female headcount to 36%.
  
• During the first half of 2021, Aldar continued to strengthen its Emiratisation programme with the addition of qualified UAE nationals to a variety of roles. The total number of UAE nationals employed across the Group increased by 4% to 33.5%.