Aldar Properties will hold off any further investments in Egypt until conditions there stabilise, a senior executive said, as the Abu Dhabi-based real estate developer reported a 22 percent jump in first-quarter profit.
Aldar, along with Abu Dhabi fund ADQ, acquired about 85.5 percent of the Sixth of October for Development and Investment (SODIC) shares in 2021 for 6.1 billion Egyptian pounds ($198m), which at the time was worth about $387m.
The investment in SODIC was to serve as a platform to expand the company’s real estate portfolio in Egypt.
On Tuesday, SODIC reported a 17 percent decline in net profit in the first quarter from the same period in 2022 and said it had cancelled 21 percent of gross contracted sales in the quarter.
“We are taking a very cautious approach to launching projects,” Faisal Falaknaz, Aldar’s acting chief finance and sustainability officer, said in a media call on Wednesday.
“We are not putting any more money into the business until things stabilise further,” he said, adding the company remained positive on Egypt in the long term.
Aldar issued a bourse statement later on Wednesday to reaffirm its commitment to being a long-term investor in Egypt.
Companies from the Gulf have been eyeing expansion opportunities in Egypt, which offers a big market for their products and services. Last April, ADQ bought stakes worth about $1.85bn in Egyptian firms.
However, persistent economic and financial pressures are leading some investors to pause their Egypt plans.
Aldar, whose projects and assets are primarily Abu Dhabi-based, is also seeking to expand in Saudi Arabia, Falaknaz said, considering potential opportunities in Riyadh and Jeddah and across all asset classes.