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Amlak Finance reports second quarter loss of US$18.2 million
Source: BI-ME , Author: BI-ME staff
Posted: Sun August 30, 2009 6:03 pm
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UAE. Amlak Finance, the largest real estate financier in the Middle East by total assets, today announced its financial results for the second quarter of 2009.

As at the end of June 2009, Amlak's net loss for the 2nd quarter stood at AED67 million (US$18.25 million). Similar to the previous quarter, "the second quarter's loss was mainly due to prudent general provisioning on the under-construction mortgage portfolio, where transaction volumes and property values continued to remain depressed," Amlak said in a statement.

Headline revenue from retail mortgage activity has been steady over the half year of 2009 showing a slight growth reaching Dhs385m compared to AED376 million for the same period last year, this on the back of a 16% growth in property financing book. There was no income from Real Estate investments activity in this quarter compared to Dhs104m in the second quarter of last year.

At the end of June 2009, Amlak's total assets stood at AED15 billion and financing portfolio stood at AEd9.5 billion, compared to AEd14.2 billion and AEd8.2 billion respectively in June 2008.

'The loss in Q2 was inevitable as Amlak had to make higher general provisions for the financing portfolio,' said Ali Ibrahim Mohammed, Vice Chairman, Amlak Finance.

'On the positive side however our assets have witnessed a growth, since Q2 of 2008 while the retail mortgage activity has seen a marginal increase over the same period.'

'As the market is showing gradual signs of revival, we have been prudent with our provisioning and taken solid steps to optimize our strategy on operational costs and liquidity management. We also anticipate the Federal Government to announce their decision on the restructure of the company which will then add further stimulus to our business operations. Although new financing is likely to remain tight over the next few months, we are adamant on service quality and support to our existing customers and stakeholders,' Mohammed added.
 
'2009 for Amlak has been a period where we have focused on maintaining the quality of our mortgage portfolio, innovative liquidity management and revisiting our long term business model to be better equipped to meet our customers' as well as all stakeholders' needs in the future,' said Arif Alharmi, Chief Executive Officer, Amlak Finance.

'Our main endeavor in the second quarter was to reduce and restructure our real estate investment obligations as well as divest from international portfolio investments. The market has a positive outlook on the long term success of the mortgage industry in the UAE. This has been highlighted in a number of independent market research studies recently which are all pointing towards a recovery,' added Alharmi.

MIDDLE EAST BUSINESS COMMENT & ANALYSIS

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