Aldar Properties had the biggest two-day drop since June as Abu Dhabi’s largest developer reported a drop in revenue and after the stock surged in July, a Bloomberg report said.
The shares fell 2.1% to 2.75 dirhams at the close in Abu Dhabi yesterday, bringing the two-day retreat to 4.2%, the worst since June 24. Aldar surged 24% last month, almost three times as fast as Abu Dhabi’s benchmark index, which lost 0.6% yesterday.
Aldar had a one-time gain of 2.6bn dirhams ($708mn) from its merger with Sorouh Real Estate Co as it posted second-quarter earnings on August 7, the first day markets in the UAE closed for Eid holidays. The company said revenue dropped 73% to 1.26bn dirhams.
“It’s a realistic correction based on people realising that 2.6bn dirhams of profits came from the revaluation of assets post-merger with Sorouh and won’t be a recurring item.” Mohammed Ali Yasin, managing editor of Abu Dhabi Financial Service Co, said by phone.
Abu Dhabi’s government backed the combination of the two developers, which are both part of the state’s drive to diversify its oil-based economy through office and leisure projects. Aldar received more than $9.8bn in bailouts from the government in 2011.