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Dubai’s Tamweel second quarter profit drops 33 percent
Quarterly profit drops for second straight quarter; Revenue falls, sales costs rise; Cash balance triples from 2011-end; Tamweel pulled asset-backed sukuk sale last week
July 11, 2012 12:26 by Reuters
Islamic mortgage lender Tamweel posted a 33 percent drop in second-quarter profit on Wednesday as revenue fell and costs rose, the Dubai-based firm’s second straight quarterly profit fall.
Tamweel, majority owned by Dubai Islamic Bank, made a net profit of 18.6 million dirhams ($5.1 million) in the three months to June 30, down from 27.7 million dirhams in the prior-year period. The firm’s first-quarter profit also fell.
Quarterly revenue dropped slightly to 136.9 million dirhams, from 141.6 million dirhams a year earlier, while “depositors’ share of profit” – sales costs – rose 8.7 percent to 88.9 million dirhams.
Tamweel had cash and cash equivalents worth 564 million dirhams as of June 30, up from 187.5 million at the end of 2011.
The company postponed a $235 million asset-backed securitisation last week following a tepid response from potential investors.
Tamweel and rival mortgage provider Amlak, an affiliate of Emaar Properties, ran into difficulties following a Dubai property crash that started in 2008.
Trading in both companies’ shares was halted in November 2008, with Tamweel resuming trading in May 2011, while Amlak remains suspended.
DIB, Dubai’s third-largest bank by market value, raised its stake in Tamweel to 58.25 percent in September 2010. Shares in Tamweel, a favourite of retail investors, have more than doubled year-to-date on the Dubai bourse.
($1 = 3.6730 UAE dirhams)
(Reporting by Matt Smith; Editing by Dinesh Nair)