TS N 2019 3 Q - Aldar Properties Uploads/IR/Results Presentations/2019/Q3/Aldar Q3 2019...Q3 2019 A...

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Aldar Q3 2019 Results

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This disclaimer governs the use of this presentation. You must not rely on the information

in the presentations and alternatively we recommend you seek advice from an

appropriately qualified professional. If you have any specific questions about any matter

in this presentation you should consult an appropriately qualified professional.

The statements made in this presentation are only forward-thinking statements. Such

statements are based on expectations and are subject to several risks and uncertainties

that could differ materially from any expected outcome or results expressed or implied in

these statements.

Without prejudice to the generality of the foregoing paragraph, we do not represent,

warrant, undertake or guarantee that the information in the presentation is accurate or

use of guidance in the presentation will lead to any particular outcome or result.

We will not be liable to you in respect of any business losses, including without limitation

loss of or damage to profits, income, revenue, use, production, anticipated savings,

business, contracts, commercial opportunities reputation or goodwill.

Aldar Q3 2019 Results 1

Q3

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▪ Development Management (DM) revenue

up 20% and gross profit up 29%, supported

by strong progress on key development

projects under construction

▪ Development sales up 272% to AED 1.12

billion during the quarter, YTD sales up

128% to AED 2.99 billion, driven by strong

demand for new project launches and sales

on inventory

▪ 80% sold across all Aldar units launched as

at period end

▪ DM revenue backlog as at 30 Sep 2019

marginally increased to AED 4.6 billion,

providing clear visibility of future revenue

cashflows

▪ 4% NOI growth to AED 397 million driven

by recent asset additions; Etihad Plaza,

Etihad Plaza and Al Jimi Mall extension

offsetting Like-for-like (LfL) rate declines

▪ Resilient 90% occupancy performance

across investment properties (residential,

retail and commercial)

▪ Solid performance for hospitality with year-

to-date occupancy at 75%, supported by

strong Abu Dhabi events calendar, ahead

of wider Abu Dhabi market at 71%

▪ Key adjacent businesses; Aldar Academies

(schools), Provis (property management)

and Khidmah (facilities management)

meaningfully contributing to Q3 numbers

Development Asset Management Corporate and other

▪ Net profit down 8% to AED 387 million,

mainly driven by one-off other income

event in the same quarter last year

▪ As at 30 Sep 2019, the balance sheet

remains robust with cash plus available

and undrawn liquidity lines of AED 5.7

billion

▪ Conservative debt position at AED 7.7

billion, well within debt policy ranges for

both asset management (37.5%) and

development management (10.3%)

businesses

1,4

97

1,6

05

Q3 2018 Q3 2019

Revenue

(AED m) (+7%)

581

662

Q3 2018 Q3 2019

Gross profit

(AED m) (+14%)

420

387

Q3 2018 Q3 2019

Net profit

(AED m) (- 8%)

301 1

,118

Q3 2018 Q3 2019

Development sales

(AED m) (+272%)

381

397

Q3 2018 Q3 2019

Recurring revenue NOI

(AED m) (+4%)

2Aldar Q3 2019 Results

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¹ As at 30 Sep 2019

RetailResidential Commercial Adjacencies & other

▪ Increased community

retail occupancy

▪ Al Jimi mall extension

opened in March 2019

▪ Yas Mall trading

occupancy 89%¹

▪ WAULT: 3.2¹ years

Hospitality

▪ Stable occupancy

▪ Asset additions,

offsetting lower

renewal rates and

divestment of Al

Murjan Tower

▪ Bulk deals now

represent 48%


▪ Stable NOI supported

by stable occupancy

and long-term leases

▪ Etihad Airways Centre

added in March 2019


▪ Strong Abu Dhabi

events calendar

supporting a 4% and

8% growth in portfolio

occupancy and ADRs

respectively versus

YTD 2018

▪ Aldar has tripled student

numbers to 22,000 over

the past 2 years across

network

▪ Provis, Aldar’s property

management businesses

now manage a total of

15,000 properties under

management

▪ Stable performance across

district cooling assets

90% occupancy¹89% occupancy¹ 91% occupancy¹ 75% occupancy¹

Asset class NOI contribution


118 123

121 121

111 1040 3

30 47

Q3 2018 Q3 2019

Resi Retail Commercial Hospitality Adjacencies and other

AED 381 mn +4% AED 397 mn

359 367

382 364

330 31020 62

63 120

YTD 2018 YTD 2019

Resi Retail Commercial Hospitality Adjacencies and other

AED 1,154 mn +6% AED 1,224 mn

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Ansam

Hadeel

Nareel Island

Al Merief

West Yas¹

Meera

Jawaher

Mamsha

Development revenue based on progress of completion

Launched development

for sale

Tender contractand early

works

Main construction

stage

Final stages of

constructionHandover

Launch date Time c.2-2.5 years

0%

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100%

18 projects within development pipeline at various

stages – 6 handed over/ in process of handover

AED 3.0 billion development sales achieved in YTD

2019, up 128% (YTD 2018: AED 1.3 billion)

AED 4.6 billion development sales revenue back log

as at 30 Sep 2019

80% sold across all Aldar units launched

(excluding handed over units)

AED 1.1 billion development sales achieved in Q3

2019, up 272% (Q3 2018: AED 0.3 billion)

Q3 2019 development highlights

Water’s Edge

Lea

Alreeman II

Saadiyat reserve

The Bridges

Alghadeer

Yas Acres

Reflection

Alreeman

Mayan

¹ West Yas is a third-party development management fee-based project


▪ Public launch in June 2019

▪ Located in Al Shamka

investment zone on mainland

Abi Dhabi near airport

▪ Master planned residential

community available to UAE

nationals only

▪ 84% sold as at 30 Sep’19

Yas Island Abu Dhabi mainland – Alshamkha

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▪ Launched at CityScape Abu

Dhabi 2019

▪ Located with Yas Acres

investment zone masterplan

on Yas Island

▪ Master planned villa land plots

for sale including 238 plots


▪ Public launch in January 2019

▪ Located in Al Shamka

investment zone on mainland

Abi Dhabi near airport

▪ Master planned villa (786

units) and commercial land

plots (220 units) for sale


Lea Al Reeman

New development launches in 2019 driving Q3 and YTD 2019 development sales

Al Reeman II

5

Saadiyat Island

▪ Public launch in September

2019

▪ Located in Saadiyat island

investment zone master plan,

close to tourist attractions

▪ 223 Master planned prime

villa land plots for sale

▪ 30% sold as at 30 Sep’19 –

further sales pending as at

period end

Saadiyat Reserve


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▪ AED 2.0 billion project value

▪ Located on Saadiyat Island

▪ Project will complete primary

infrastructure works to Saadiyat

Island

▪ Development management fee

▪ Handover from 2021


▪ Located in existing Al Falah

residential community near airport

▪ Master planned villa development

including 899 residential units

▪ Fixed price offtake to government


Saadiyat infrastructure Al Falah residential


▪ Located on Yas Island

▪ Includes 100,000 sqm GLA that will

ultimately house 10,000 employees

▪ Fixed price offtake to government


Twofour54 media free-zone

AED 5 billion in projects awarded by government in July

2019 across national housing,

6

AED 3 billion contracts awarded in July for Al Falah,

twofour54 and first phase of Saadiyat infrastructure

AED 3 billion added to revenue backlog in July 2019,

driven by offtake on Al Falah and twofour54

AED 100mn/ year

AED 150mn/ year

2016A-2018A 2019E-2021E

Development Management segment gross profit guidance increased 50% following recent govt

awards (AED mn)


100% owned

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Robust balance sheet position

Key balance sheet highlights

▪ AED 1.2 bn increase in DWIP and inventories due to progress on

current development projects, reclassification of land cost on newly

launched projects (Alreeman and Reserve)

▪ AED 4.8 billion gross cash – AED 2.0 bn relates to Aldar’s free and

subsidiary cash, AED 1.9 bn restricted and AED 0.8 bn escrow

▪ AED 0.7 bn increase in gross debt to AED 7.7 bn, predominantly

due to addition of Etihad JV AM assets and higher borrowing on

development business to support short term working capital needs

Prudent capital management and governance in place

▪ Aldar Investments – highest non-GRE, corporate rating in

region

▪ Debt position remains well within debt policies

▪ As at 30 Sep 2019, Aldar’s cost of debt was 4.0% and

average debt maturity was 4.2 years. Post Oct’19 new

sukuk issuance, debt maturity increased to 5.4 years

▪ Strong liquidity position with undrawn facilities of AED 3.7

billion

Aldar Properties

Development

Management

65-80% DFCF 20-40% profit

Aldar Investments

(Baa1 – Moody’s)

35-40% LTV (37.5%)

<25% LTV (10.3%)

Dividend policy

Debt policy(As at 30 Jun 19)

7

Asset

Management


AED millions As at 30 Sep19 As at 31 Dec18

Assets

Property, plant and equipment 3,477 3,601

Investment properties 16,993 16,408

DWIP and inventories 7,956 6,749

Investments in associates and JVs 214 994

Receivables and other assets 6,451 5,778

Cash 4,796 5,015

Total Assets 39,886 38,544

Equity and liabilities

Equity 24,368 24,236

Debt 7,725 7,056

Payables, advances and other liabilities 7,793 7,252

Total equity and liabilities 39,886 38,544

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SStrong YTD 2019 following four successful development launches

Constructive supply-demand dynamics supporting Abu Dhabi real

estate market fundamentals

Resilient occupancy performance across Asset Management

business

Development revenue growth driven by progress on key projects

under development and strong inventory sales

Balance sheet remains strong and liquid, well within debt policy

ranges for both Asset Management and Development management

Proactive measures by Government to spur growth providing

broader market support

On track to

achieve

2019 development

sales guidance

AED

4 billion

On track to

achieve

2019 AM NOI

guidance

AED

1.7 billion


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Y▪ Q3 development sales of AED

1.1 billion mainly driven by

West Yas (AED 305 million

across 62 units), Alreeman II

(AED 269 million across 265

plots), Yas Acres (AED 159

million across 41 units),

Saadiyat Reserve (AED 156

million across 66 plots), Lea

(AED 55 million across 28

plots), two Saadiyat land plots

(AED 35 million) and

Reflections (AED 30 million

across 28 units

▪ Revenue backlog as at 30 Sep

2019 now stands at AED 4.6

billion (30 Jun 19: AED 4.5

billion)

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¹ Sold units and sold units sales value includes all units where a sales purchase agreement (“contract”) has been signed. This does not include sales reservations or units still in process. Total units and values as at period end are net of

cancellations.


Project Location Launch date

Total as at 30 Sep 19

Expected

completion Sold units ¹Sales value (AEDm)

¹Units launched % sold

%

completion

Ansam Yas Island 2014 519 911 547 95% 100% Handed over

Hadeel Al Raha Beach 2014 229 487 233 98% 100% Handed over

Nareel Abu Dhabi Island 2015 78 1,001 161 48% 100% Handed over

Merief Khalifa City 2015 270 600 281 96% 100% Handed over

Meera Reem Island 2015 383 492 408 94% 100% Handing over

Mayan Yas Island 2015 420 765 512 82% 81% 2020

Yas Acres Yas Island 2016 559 2,112 652 86% 73% 2019/20

Mamsha Saadiyat Island 2016 196 786 461 43% 91% 2019

Jawaher Saadiyat Island 2016 71 636 83 86% 91% 2019

The Bridges Reem Island 2017 591 594 636 93% 85% 2020

Water's Edge Yas Island 2017 1,171 1,177 1,236 95% 30% 2020/21

Reflection Reem Island 2018 112 114 192 58% 0% 2021

Alghadeer Seih Sdeirah 2018 384 270 707 54% 22% 2021

Al Reeman Al Shamka 2019 902 1,428 1,012 89% 0% 2021

Lea Yas Island 2019 202 399 238 85% 0% 2021

Al Reeman II Al Shamka 2019 466 470 557 84% 0% 2021

Reserve Saadiyat Island 2019 66 156 223 30% 0% 2021

Aldar developments (ex handed over) 5,523 9,399 6,917 80%

West Yas Yas Island 2015 865 3,981 1,017 85% Handing over

West Yas plots Yas Island 2018 47 181 194 24% 2021

Total developments 6,435 13,561 8,128 79%

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HANDED OVER

AnsamType: Prime residential apartments

Land: Investment zone

Location: Yas Island

Units launched: 547

Sold as at 30 Sep 2019: 95%

HANDED OVER

Al HadeelType: Prime residential apartments


Location: Al Raha Beach

Units launched: 233


COMMENCED HANDOVER

Nareel IslandType: Exclusive land plots for villa development

Land: Non-investment zone

Location: Nareel Island, off Abu Dhabi Island

Units launched: 161


COMMENCED HANDOVER

Al MeriefType: Land plots for villa development

Land: Non-investment zone

Location: Khalifa City

Units launched: 281


COMMENCED HANDOVER

West YasType: Villa development



Units launched: 1,017



COMMENCED HANDOVER

MeeraType: Residential apartments


Location: Reem Island

Units launched: 408


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EXPECTED COMPLETION: 2019

MayanType: Prime residential apartments



Units launched: 512



MamshaType: Beachfront residential apartments


Location: Saadiyat Island

Units launched: 461


EXPECTED COMPLETION: 2019/20

Yas AcresType: Villa and townhouse development



Units launched: 652



The BridgesType: Mid-market residential apartments



Units launched: 636



EXPECTED COMPLETION: 2020/21

Water’s EdgeType: Mid-market residential apartments






JawaherType: Golf-view villas and townhouses



Units launched: 83


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ReflectionType: Mid-market residential apartments



Units launched: 192



AlghadeerType: Residential land plots


Location: Seih Sdeirah

Units launched: 707



AlreemanType: Mid-market residential land plots


Location: Al Shamka





Lea Type: Residential land plots



Units launched: 238



Alreeman IIType: Mid-market residential apartments

Land: Non-Investment Zone

Location: Al Shamkha

Units launched: 557



Saadiyat Reserve Type: Residential land plots



Units launched: 223


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478,273 sqm GLA¹

Residential Commercial Adjacencies

Consolidating assets:

▪ Yas Mall

▪ Al Jimi Mall (extended

in Mar’19)

▪ Remal Mall

▪ Yas Retail Park (IKEA

and Ace)

▪ Community retail (25

assets)

▪ Etihad Plaza (acquired

in Mar’19)

Hospitality

5,621 units¹ 318,074 sqm GLA¹ 2,930 keys¹


▪ Al Rayanna

▪ The Gate Towers

▪ Sas Al Nakhl

▪ Sun & Sky Towers

▪ Khalidiya Village

▪ Al Oyoun

▪ Al Mamoura

▪ Al Zeina

▪ Al Bandar

▪ Eastern Mangroves

▪ Cranleigh staff

accommodation

▪ Etihad Plaza (acquired

in Mar’19)

▪ Al Murjan (sold in

Mar’19)


▪ Aldar HQ

▪ Al Mamoura

▪ Baniyas

▪ Sky Tower

▪ Daman House

▪ International Tower

▪ North Park

▪ Motorworld

▪ Repton School

▪ The Wing

▪ Al Ain OV

▪ Saadiyat OV

▪ Etihad Airways Centre

(acquired in Mar’19)

▪ Yas OV (sold in Jun’19)


▪ Yas Hotel

▪ Crowne Plaza Yas

▪ Staybridge Yas

▪ Rotana Yas

▪ Radisson Blue Yas

▪ Park Inn Yas

▪ Centro Yas

▪ Tilal Liwa

▪ Yas Links golf club

▪ Eastern Mangroves

▪ Westin Abu Dhabi

▪ Saadiyat Beach club

▪ Saadiyat golf club

▪ Abu Dhabi golf club

▪ Al Bateen Marina

▪ Excludes non-

consolidating assets of

Hala Arjaan

Key consolidating

assets and businesses:

▪ Education - Aldar

Academies and

Cranleigh school

▪ Facilities management

(Khidmah)

▪ Property management

(Provis)

▪ Construction – Pivot

▪ District Cooling -

Saadiyat District

Cooling and Saadiyat

Cooling

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¹ As at 30 Sep 2019


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▪ Abu Dhabi approved an AED 50bn development plan

to enhance the competitiveness of Abu Dhabi.

▪ ‘Ghadan 21’ is a programme that aims to make Abu

Dhabi one of the best cities in the world to do

business, invest and live in. Initiatives include:

▪ AED520m tech hub ‘Hub71’ to support startups

▪ Licensing scheme to provide 13 new business

activities in tech and innovation

▪ Dh500 mn Ghadan ventures fund to support

new businesses

▪ AED 3bn budget to improve social facilities

▪ 300 initiatives to improve quality of life

▪ Up to 15,000 additional housing loans for UAE

citizens to issued by the end of 2019

▪ Advantage Abu Dhabi initiative to attract large

scale sporting, culture and business events to

Abu Dhabi

▪ AED1 billion of incentives for agriculture

technology (AgTech) firms

▪ Agreement with artificial intelligence firm SenseTime

for Abu Dhabi R&D hub, creating 600 jobs

Abu Dhabi Government initiatives

▪ ADNOC capex plans - five-year investment plan of

$132 billion (AED486bn) for upstream, midstream,

and downstream segments of its business.

▪ ADNOC Downstream - $45bn (AED165bn) new

investment on downstream operations, including the

expansion of Ruwais complex with a third refinery,

expanding capacity by 600,000 bpd to reach 1.5

million bpd by 2025.

▪ ADNOC infrastructure - Singapore’s sovereign wealth

fund GIC, BlackRock and KKR also invested in

ADNOC’s pipeline infrastructure with a total deal

value of $5 billion.

▪ Abu Dhabi has built the world’s largest independent

solar power plant, Noor Abu Dhabi, in Sweihan, with

a capacity at 1.17GW at the cost of AED 3.2bn.

▪ The Tajer Abu Dhabi license is open to all GCC

nationals and UAE residents, under a new ‘Golden

Package’.

▪ Companies are eligible to obtain commercial

licenses without a physical office.

▪ 5 and 10-year (Gold Card) renewable visas

introduced for first time.

▪ Investors investing at least Dh10 million would

qualify for 10-year visas, while entrepreneurs

and special talents would be entitled to five-

year residency.

▪ Foreigners allowed to own freehold property in

investment zones.

▪ Introduction of 100% foreign ownership in 122

economic activities across 13 sectors.

▪ Under an agreement with First Abu Dhabi Bank

(FAB) the government will also guarantee up to 75

per cent of bank loans to small and medium-sized

enterprises.

Federal announcements

Policy reform, stimulus and energy strategy supporting growth and increasing development in region

Energy industry expansion


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Profit and loss Balance sheet

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¹ As at 30 Sep 2019


AED millions 30-Sep-19 30-Jun-19

Property, plant and equipment 3,477 3,515

Investment properties 16,993 17,023

Development work in progress 3,393 3,083

Inventory and land held for resale 4,563 4,311

Receivables 6,202 5,736

Cash 4,796 3,841

Other Assets 462 506

Total Assets 39,886 38,015

Equity 24,368 24,014

Debt 7,725 7,326

Payables, Advances and Other

Liabilities7,793 6,675

Total Liabilities and Equity 39,886 38,015

AED millions Q3 2019 Q3 2018 YTD 2019 YTD 2018

Revenue 1,605 1,497 5,026 4,478

Direct costs(943) (916)

(2,972) (2,533)

Gross profit 662 581 2,054 1,945

Gross profit Margin 41% 39% 41% 43%

SG&A expenses(105) (101)

(301) (281)

Depreciation, amortization and

write downs/ provisions (73) (66) (221) (187)

CSR contribution (5) (10) (15) (30)

Gain/ Loss on disposal of JV/

Investment Property/ PPE- - - 30

Share of profit from associates/

JVs(1) 16 (2) 52

Gain on disposal of PPE - - 23 -

Net finance income/expense (66) (59) (201) (162)

Fair value loss on investment

properties, impairments and

write downs

(40) (40) (120) (270)

Gain on business combination - - - 133

Other Income 14 100 140 304

Net Profit for the period 387 420 1,356 1,534

Attributable to:

Owners of the Company 383 421 1,407 1,537

Non-controlling interests 4 (1) (51) (3)

Profit for the period 387 420 1,356 1,534

Basic and diluted earnings per

share (fils)0.049 0.054 0.179 0.195

432

124

406

40

603

435

129

398

19

516437

135

393

41

652

Investment Properties Hospitality & Leisure Adjacent Businesses Development Management Property Development

Q3 2019 Segmental Revenue Performance

Q3 2019 Q3 2018 Q2 2019

AE

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348

3

57 38

217

350

-32 17

181

353

3 50 38

225


Q3 2019 Segmental Gross Profit Performance

Q3 2019 Q3 2018 Q2 2019

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¹ Recurring revenues assets include Investment Properties (Retail, Residential, Commercial and OVs), Hospitality (Hotels & Leisure), Schools (Aldar Academies), Property & Facilities Management (Khidmah) and District Cooling assets

Q3 2019 recurring revenues excludes Pivot revenue of AED168m (Q3 2018 revenue: AED181m and Q2 2019 revenue: AED159m)

Q3 2019 recurring gross profit excludes Pivot gross profit of AED10m (Q3 2018 gross profit: AED1m and Q2 2019 gross profit: AED10m)

Q3 2019 recurring revenues of AED 794 million (Q3 2018: AED 781 million, Q2 2019: AED 806 million) ¹

Q3 2019 recurring revenues gross profit of AED 397 million (Q3 2018: AED 381 million, Q2 2019: AED 396 million) ¹


1,038

62 156

100

698

1,074

19 61 47

740


YTD 2019 Segmental Gross Profit Performance

YTD 2019 YTD 2018

AE

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1,290

469

1,213

107

1,946

1,320

377

1,057

58

1,667


YTD 2019 Segmental Revenue Performance

YTD 2019 YTD 2018

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YTD 2019 recurring revenues of AED 2,457 million (YTD 2018: AED 2,266 million) ¹

YTD 2019 recurring revenues gross profit of AED 1,224 million (YTD 2018: AED 1,153 million) ¹

18

¹ Recurring revenues assets include Investment Properties (Retail, Residential, Commercial and OVs), Hospitality (Hotels & Leisure), Schools (Aldar Academies), Property & Facilities Management (Khidmah) and District Cooling assets

YTD 2019 recurring revenues excludes Pivot revenue of AED515m (YTD 2018 revenue: AED487m)

YTD 2019 recurring revenues gross profit excludes Pivot gross profit of AED31m (YTD 2018 gross profit: AED2m)Aldar Q3 2019 Results

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¹ Al Raha Beach land plot handed over in Q3 2016 with a payment plan structure

² Cash flow timing projection, subject to change

Remaining cash inflows

Transaction (AEDm) Q4 2019 2020 Total

Sale of Al Raha Beach Land ¹ - 95 95

Infrastructure recoverables ² - 250 250

- 345 345

AED 345 million remains outstanding as at 30 Sep

2019 – collection expected in 2020

19

AED 279 million received in 2019

YTD


For any further enquiries please contact:

Chris Wilson

Head of Investor Relations

+ 971 2 810 5624

[email protected]

Mohamed ALMaazmi

Investor Relations

+ 971 2 810 5866

[email protected]

CO

NTA

CT

US


mailto:[email protected]

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