Amlak makes steady progress on recovery path

Dubai: The mortgage provider Amlak is getting back into its groove with a third quarter net profit of Dh57 million compared with Dh7 million over the same period last year. More pertinently, the third quarter number represented the bulk of the net group profit of Dh71 million for the first nine months. (In a year-on-year perspective, the first nine months’ net is down 11 per cent from last year.)

On the operational side, revenues from financing declined by 23 per cent to Dh222 million for the nine month period. However, counterbalancing this was the fact that “profit distribution to financiers decreased in tandem to Dh108 million compared with Dh183 million for the same period last year, reflecting improved net profit income from the core business activity of the company”.

The overall revenue for the three quarters was Dh343 million, and on par with what it did last year. This included the Dh17 million generated from associate companies’ business operations in Saudi Arabia. (For Q3-15 alone, total revenue came to Dh123 million, up 13 per cent year-on-year and helped by ‘net gains on disposal of real estate assets’. This included the Dh23.5 million from selling assets in Nad Al Hamar and bringing the nine-month revenue from this development to Dh44.3 million.)

“The positive results are a reflection of the clear and focused strategy we are working with, which not only enables us to achieve our financial targets, but equally important allows us to over deliver on our financial commitments,” said Arif Al Harmi, Managing Director and CEO.

“We have proactively paid Dh200 million to our financiers for redemption of the Mudaraba Instrument within the first year of our financial restructuring which demonstrates our commitment to quickly turning around our business.”

Redemption of the Mudaraba Instrument was funded by payments received from sales of land in Nad Al Hamar.

The drop in profits distributable to financers was a “result of the issuance of a Dh1.3 billion Mudaraba Instrument” to them in lieu of a portion of their facilities. In addition, Amlak has settled nearly Dh3.3 billion in payments with financiers since the completion of restructuring in August 2014.

Total assets are lower by 8 per cent to Dh6.7 billion for the nine months. This was a result of lower financing and investing assets portfolio. For the same period, the balance-sheet equity position also decreased from Dh1.7 billion to Dh1.52 billion, an 11 per cent decrease mainly on the back of the Dh200 million Mudaraba Instrument redemption.

Source: Staff Report, gulfnews.comGN

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