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Dubai: A more varied mix to its product portfolio — which includes an expanding presence in hospitality and serviced apartments — in the UAE helped Damac Real Estate Development Ltd. post revenues of $1.2 billion (Dh4.4 billion) in 2013.
This represents a 77 per cent gain over 2012’s tally of $692 million. Operating profit weighed in with a 199 per cent increase to $636.4 million.
On dividends, Damac Properties is targeting a payout ratio of between 30-50 per cent of 2014 distributable earnings, to be paid on a semi-annual basis.
Sales of new projects in the UAE have been driving the numbers, including the additions being made at the upscale Akoya project, which involves a mix of apartments and villas apart from branded community amenities.
Gains have also come from the developer’s overseas interests. Also in December last, it got listed on the London bourse.
But the developer reckons that growth this year is bound to be more measured. “2014 has started well and we are well positioned for continued robust growth, albeit on a more measured basis in the medium to long term,” said Hussain Sajwani, executive chairman and chief executive of Damac.
Last year, new land bank valued at $176.3 million was bought, which would encompass more than 2,000 units. This would bring the developer’s total pipeline to 25,000 units plus across 42 projects.
The order book stands at 77 per cent sold for projects scheduled for delivery this year. Damac Properties was among the handful of developers to come out with off-plan ventures to feed investor demand in the last year and more. The developer maintained the pace with selective releases thereafter as well as adding new components to Akoya. The hospitality venture, Damac Maison, will also be adding new properties under its branding.
“We expect Dubai’s strong economic fundamentals, regional safe-haven status and improving business sentiment,” said Sajwani. “Outside of Dubai, the company has expanded into large and growing markets with scalable potential, including Saudi Arabia and Qatar.”
Net cash as of end 2013 was $492.9 million from 2012’s $14.8 million, while net cash generated from operating activities grew to $484.1 million.
“Our focus on cost management and aggressive business strategy, which gives control of every component of the development cycle, has ensured strong gross profit margin, at 64.4 per cent [2012: 40.7 per cent], operating profit margin at 52 per cent [2012: 30.7 per cent] and net profit margin at 52.4 per cent [2012: 30.7 per cent],” said Sajwani.
“We are well positioned to benefit from the growth in Dubai and elsewhere in the region. We remain confident this will be the case.”
Source: Manoj Nair, Associate Editor, gulfnews.com