The builder of the Yas Marina Formula One circuit reported its fifth straight quarterly loss of 11.14 billion dirhams ($3 billion) in the last three months of 2010 having taken writedowns of 11.3 billion dirhams in 2010, 10.8 billion dirhams booked in the final quarter.
That compared with analysts’ average forecast for a loss of 445.8 million dirhams in the fourth quarter.
“The key reasons behind this mega-loss are the asset impairments, provisions and fair value losses booked on investment properties,” said Roy Cherry, real estate analyst at Shuaa Capital.
“Our view on the name remains unchanged and we continue to have a long-term negative outlook... Aldar continues to be exposed to high execution and solvency risks.”
Debt-laden Aldar, which is part-owned by the government, unveiled a restructuring plan last month and said it would sell assets worth $1.49 billion to the government to meet looming debt obligations.
Aldar said then it would also issue 2.8 billion dirhams in convertible bonds to Mubadala, an Abu Dhabi investment vehicle and raise $2.97 billion, partly through asset sales.
Aldar’s shares are down 16 percent so far this year, after plunging as much as 54 percent in 2010. The shares ended flat on the Abu Dhabi bourse on Tuesday ahead of the results.
Aldar chairman Ahmed Al Sayegh said in a statement that the property developer would take “a measured approach to development, adapting to prevailing market conditions".
The developer’s chief financial officer told investors last month that it would return to profit in 2011.
Losses for 2010 rose to 12.7 billion dirhams compared with a 2009 profit of 837.4 million dirhams.
Revenue in 2010 fell 9 percent to 1.8 billion dirhams.
Credit Suisse downgraded Aldar a notch to “underperform” saying continued high capital expenditure spending and leverage should continue to limit cash flow generation ability.
