Aldar Properties expected to post a net loss of Dh266.4 million
Investment bank EFG-Hermes (EFGH) has downgraded its forecast for Abu Dhabi-based Aldar Properties’ Q2 topline and bottomline “due to a slower-than-expected handover process for units”.
In a research note issued on Monday, the bank now projects Aldar to post revenues of Dh307.9 million compared with an earlier estimated Dh1.4 billion, and a net loss of Dh266.4m compared with an earlier forecast of Dh105m, for the quarter ended June 30, 2010.
“This [the delay in handover] is something that we have seen consistently across most developers and is not something that should be a cause for major concern,” EFGH analyst Jad Abbas told Emirates 24|7.
“Despite the projects being close to completion, unit handovers have been slower than expected such that units within the Al Bandar precinct on Al Raha Beach are currently in the ‘snagging’ process, with handovers expected to commence in Q3 2010,” Abbas wrote in the note.
The bank has, for now, maintained its neutral rating on Aldar’s stock but said that that could change depending on the actual Q2 numbers reported by the real estate firm.
“We maintain our neutral rating and fair value of Dh4.40 per share on Aldar based on the continuingly weak land sales environment coupled with the developer’s high leverage and short-term tight liquidity situation, which is being exacerbated by the outstanding Dh9.1bn government receivable, an issue we will keep an eye out for in Aldar’s Q2 2010 results. We will likely revisit our forecasts and valuation approach following Aldar’s Q2 2010 results release,” it said.
Emirates Business
