Amlak Finance, the Dubai mortgage lender whose shares were frozen for six years after the 2008 financial crisis, reported an 87 per cent decline in second-quarter profits.
Amlak earned net income of Dh7.2 million in the three months to June 30, down from Dh55.7m the previous year.
That was driven by a 30 per cent decline in revenues from its main financing business, which earned Dh64.9m from Islamic financing and investing assets, down from last year’s total of Dh92.8m.
Amlak recorded Dh20.8m in revenue from uncompleted real estate projects. IFRS 15, an accounting convention, allows the company to book revenue from a project that has not yet been handed over to customers.
Had Amlak not booked this revenue, the company would have run a loss of about Dh13.6m in the second quarter.
Financing assets declined by 14 per cent over the last six months. That, and the booking of revenue from real estate, suggests that Amlak is moving away from providing mortgage financing, and towards acting as a property developer, one analyst said.
Amlak, which has recognised a number of major impairments over the last six years as its asset portfolio lost value after Dubai’s property crash, recognised further impairment charges of about Dh52m in the second quarter.
Amlak shares fell 2.6 per cent on the Dubai Financial Market to close at Dh2.21 per share.
Follow The National’s Business section on Twitter