Damac records Q1 net profits of Dh1.05b

Damac records Q1 net profits of Dh1.05bAykon City / Image Credit: Damac Properties

Damac Properties recorded a first-quarter dip in both revenues — to Dh1.62 billion from Dh1.79 billion a year ago — and on net profits — at Dh1.05 billion from Dh1.23 billion. The company has not given any particular reasons for the decline, but the state of the market was muted through the better part of the quarter.

Even then the developer will be taking a lot of confidence from the fact that sales during the first three months was Dh2 billion and on par with what it did during Q4-2015. The figure also represents a 5 per cent from the ''lows of Q3-15, which shows continuous good interest in our products and the Dubai market'', the statement added.

Another big plus is that its gross profit margin was at 61 per cent.

''The Dubai market is defying the sceptics — The levels of interest, activity, transaction values and volumes are solid,'' said Hussain Sajwani, Chairman, in a statement. ''We expect the city will consistently outperform more established metropolitan centres around the world.''

As of March 31, total assets were valued at Dh23.74 billion, up by 1 per cent compared to end December. Its land bank has been boosted with the acquisition of plots on the Dubai Canal extension and on which it launched an upscale high-rise cluster called ''Akyon City'' (spread over 4 million square feet). Together with the already established Akoya projects — both at a mature phase from a sales perspective — Damac has a robust supply pipeline for the next two to three years.

In the first three months, it delivered 300 plus units, while for the full year, the developer is eyeing deliveries of between 2,700-3,000 units. The overall Dubai residential market could see handovers of about 15,000 units plus, based on conservative estimates.

''We have developed a market leading brand firmly positioned in the luxury real estate sector,'' said Sajwani. ''Adding to this business model that is focused on returns and sales channel innovation, we have powerful differentiators that will support a continued pipeline of unique products.''

A solid cash position

* Cash and bank balances for Damac Properties were at Dh9.42 billion while the value of its development properties were at Dh9.42 billion, as of March 31, 2016.

* Net cash generated from operating activities were at Dh241 million, while EPS (earnings per share) was Dh0.17.

Have a look into the fragmented decline of residential markets

Source: Manoj Nair, Associate Editor, gulfnews.comGN


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