United Development Co. net up 18% as sales rise

Pearl Qatar developer sees work in progress assets rise in strong year

The company's balance sheet has swelled on the success of Pearl Qatar so far.
The company's balance sheet has swelled on the success of Pearl Qatar so far.

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United Development Company, developer of the Pearl Qatar off Doha’s coast, saw net profits last year rise 18% against 2009, as the value of total assets rose by more than QR 2 billion.

The rise in after-tax gains reached QR 597 million from QR 505 million last year despite a 19% fall in revenues; the shortfall was made up by a 38% in the cost of revenue. Returns from its operating activity rose by a third to QR 535 million.

The company – one of the biggest developers in Qatar with a market capitalisation of QR 3.8 billion – has seen both its inventories and assets deemed ‘work in progress’ both increase in value. Inventories rose 47% to QR 209.2 million, with work in progress up 42% to QR 2.764 billion.

The Pearl Qatar, a US $5 billion mega project of residential, commercial and tourist development built on a crescent-shaped artificial island, has been one of the chief sources of revenue for the company and a project that has seen some of the most constant activity among the equivalent offshore projects in the region.

The island is divided into districts and the project will include three 5-star luxury hotels with a total room capacity of 800, four marinas, retail space. The master plan of the Pearl shows buildings ranging from high-raise towers to 4-storey buildings and villas will cover the entire site, with space for 40,000 residents planned.

The company cut any losses from discontinued operations last year, after losing QR 8 million over 2009. The company’s non-current assets – including plants, machinery, general investments and investment property – rose just less than 15% to QR 5.58 billion as its total assets increased in value to QR 10.877 billion from QR 8.96 a year previously.

The company has loans of just over QR 1 billion that will mature in a year from 31st December 2010, with just over QR3 billion in loans that mature between two and five years from that date, according to the company’s financial statement.

UDC revealed in August that it would sell around US$400 million of convertible bonds by the end of 2010 to fund its projects and new business lines, including facilities management.

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