Damac’s profit down 87% as revenue drops while costs and expenses rise
Dubai’s Damac Properties reported a 87 per cent slide in second-quarter net profit on the back of lower revenue and rising expenses as well as costs.
Net profit attributable to the owners of the company for the three-month period ending June 30 dropped to Dh50.6 million, the company said yesterday in a statement to the Dubai Financial Market, where its shares trade. Revenue plunged 46 per cent at the end of the second quarter to Dh971m from the same period a year earlier, while expenses increased to Dh238m.
Net profit for the first half of the year fell 90 per cent to Dh81.6m from a year earlier. Revenue dropped 48 per cent to Dh1.9 billion.
“We remain financially robust, and with the UAE economy poised for growth in the coming years, we are looking forward to an upturn in the real estate sector,” said Hussain Sajwani, chairman of Damac Properties.
He also said the company will continue to focus on deliveries this year, completing and handing over projects that are in the development pipeline.
“We have made significant progress in our master communities, Damac Hills and Akoya, and both communities are welcoming many more residents this year,” Mr Sajwani said,
Damac delivered 1,476 units in the first half of the year including the first handover yet in Akoya, the company’s largest master development, with nearly 315 units in the Claret cluster completed and in the process of being handed over to customers.
Damac also completed two other projects in Dubai – Ghalia and Tower 108, it said.
The company has reduced its gross debt by Dh1.4bn in the past 12 months. As of June 30, gross debt stood at Dh4.1bn, cash and bank balances stood at Dh5.6bn, Damac said.
Separately Arabtec Holding, a Dubai-listed contractor, reported a 47 per cent slide in second-quarter net profit as costs and expenses increased.
Net profit attributable to the owners of the company for the three-month period ending June 30 dropped to Dh26m, the company said in a regulatory filing to the Dubai Financial Market, where its shares trade. Revenue for the period fell 8.7 per cent to Dh2.19bn for the reporting period from the same period a year earlier. Costs in the second quarter reached Dh2bn and expenses widened to Dh92m.
“We remain committed to our strategy of diversifying our backlog across the infrastructure and industrial sectors,” said Arabtec’s group chief executive Peter Pollard. “During the first half of the year, we have secured new contracts in the industrial sector which we expect to continue.
“With a particular focus on strengthening our balance sheet, we continue to reduce our debt by Dh373m during H1 2019.”
“Our strong pipeline of tender opportunities coupled with Arabtec’s long-standing market reputation provides us with a strong base to grow the company and deliver on our strategic road map. We also remain focused on diversifying our backlog geographically,” Mr Pollard said.
Arabtec’s backlog remained strong at Dh14bn despite the decline in new awards during the first half of the year, according to the company.
Net profit for the first half of the year fell 49 per cent to Dh57.9m from a year earlier. Costs in the period narrowed slightly to Dh3.9bn while expenses widened to Dh206m.