RAK Properties net falls 28% for first half 2011
Market still muted despite upturn in sales of units in second quarter
RAK Properties, Ras Al Khaimah’s biggest developer, saw net profits fall by 38% and 28% for the last three-month and six-month periods this year, respectively, compared to the same period in 2010.
After tax, the company made AED 33.1m in the last quarter, down from AED 53.6m for the same period last year, though revenue increased 23.3% to AED 57.8m, as early handovers in June in the units of its 45-storey Julphar Tower in its home emirate, RAK Tower in Abu Dhabi, and a few residential units in Mina Al Arab – its AED 10bn coastal development – were captured on the balance sheet for the period.
For the first six months the company made AED 66.86m, down 28.6% from the AED 96.24m in 2011, though revenue increased from AED 46.9m to AED 65.42m, up 39.4% with a subsequent rise in sales costs. The value of the company’s trading properties under development rose 16.2% to AED 1.58bn.
RAK Properties has four key developments across Ras Al Khaimah and Abu Dhabi, though plans for its Mina Al Arab project – which is spread along part of the coast of the fourth biggest emirate, and includes two artificial islands – have had to be scaled back in areas after the financial crisis.
Details from a shareholder meeting in April show that the company has reduced its plan for 10 hotels on the project to just a single hotel, despite already signing agreements with four operators.
The company said it has received a AED 91.8m loan from the government’s Investment Development Office during the first quarter to fund further developments. Its financial statement further shows that it took AED 489.8m in government grants in the last quarter, though the interest paid on loans for the last three and six-months decreased against 2010. Its cash balance at 30 June 2011 stood at AED 295m.
The company said it is soon to start the handover of 20 buildings in Precinct 2 of Mina Al Arab, a total of 808 apartments.