UAE-based real estate financier, Amlak Finance, has reported net profits of ($2.04m) AED7.5m for the first quarter of 2017.
Revenue from its financing business activities decreased by 20% to $12.8m (AED47m) in Q1 2017, compared to 16.06m (AED59m) for the same period last year.
This was due to a decrease in the financing portfolio. The drop in revenue from sales of real estate is underpinned by a softening in general market conditions, according to a company statement.
Amlak’s rental income increased by 15% during Q1 2017 to $4.08m (AED15m), compared to $3.53 (AED13m) in Q1 2016. Other income increased by 27% in Q1 2017 to $3.81m (AED14m) compared to $2.3m (AED11m) in the same period last year.
Operating costs improved by 3% to $7.9m (AED29m) for Q1 2017 compared to $8.16m (AED30m) reported in Q1 2016. This was a result of Amlak’s ongoing cost management strategy. These figures exclude operating costs of joint venture relating to real estate development, it said.
An impairments reversal of $1.6m (AED6m) was also recorded during Q1 2017, reflecting a slight improvement in portfolio quality. This is compared to an impairment charge of $1.6m (AED6m) in Q1 2016.
The financier also recorded an amortisation cost of $7.35 (AED27m) in Q1 2017. Amortisation will continue although expectedly at a lower rate in the future until the financers have been fully repaid by the end of the restructuring period.
Profit distributable to financers stood at $8.44m (AED31m) in Q1 2017, in comparison to $8.71 (AED32m) in the same period last year. The slight decrease was due to a reduction in overall Islamic deposit liabilities.
Total assets were just over $1.76bn (AED6.5bn) in Q1 2017, representing a 1% increase from year end 2016. A marginal increase of 1% in equity attributable to shareholders was also seen in Q1 2017 from year end 2016.
Commenting on the results, Arif Alharmi, managing director and chief executive officer of Amlak, said: “Q1 2017 proved to be somewhat challenging, as we continue to face uncertainty in the global economic environment.
“We will also continue with our strategy and efforts to develop the infrastructure and sale of the Nad Al Hamar land plots which will support the overall revenue and profitability of the company.”