UAE: Damac reports 27% fall in H1 2016 net profits
During the first six months of 2016, the developer recorded revenues of $898m (AED3.3bn)
Dubai's luxury developer Damac Properties reported a 27% drop in its net profit for the first six months of 2016.
During the first six months of 2016, Damac recorded revenues of $898m (AED3.3bn), while net profit for the reporting period stood at $517m (AED1.9bn) compared to H1 2015.
Total assets increased to $6.3bn (AED23.5bn) ending 30 June, 2016, compared to $6.3bn (AED23.4bn) ending 31 December, 2015.
Cash and bank balances stood at $2.3bn (AED8.8bn) whilst development properties were recorded at $2.5bn (AED9.5bn), as at 30 June 2016.
With continued momentum in the company’s building program, the management maintains unit delivery guidance for full year 2016 in a range of 2,700 – 3,000 units. In the first half, 494 units were delivered in Dubai and Beirut.
During the reporting period, booked sales reached $980m (AED3.6bn), marginally below the previous three quarters run rate, due primarily to the full impact of Ramadan in this quarter.
The higher transaction numbers and square footage sales show continued stability in demand for Damac’s products and the Dubai market. With these results and a stronger than seasonal start to Q3 2016, the management reiterated guidance for full year sales to be greater than $1.9bn (AED7bn).
Hussain Sajwani, chairman of Damac Properties, commented: “The Dubai market remains solid. The levels of interest in our new product launches and existing portfolio are healthy."
In the first half of 2016, Damac added Aykon City to its portfolio of projects, a landmark in freehold developments on Sheikh Zayed Road.
Sajwani continued: "We believe that Dubai is well positioned for continued growth, and we expect the city to consistently outperform more established metropolitan centers around the world. This outperformance is underpinned by a stringent and efficient regulatory framework stemming from the government’s vision to create a sustainable city which enhances the experience of those living, working and visiting Dubai.”
Damac also announced the launch of the much-awaited 60-storey residential tower within Aykon City, following the first quarter launch of the hotel and serviced apartments’ tower within the same development. The residential tower represents one of the few opportunities to own a luxury residence overlooking the Dubai Canal.
Furthermore, following a sold-out phase one, Damac has recently announced a limited release in Ghalia during the holy month of Ramadan to target the growing halal tourism sector. Ghalia offers the first certified Sharia-compliant serviced hotel apartments, with construction already underway, and will be operated by Damac Hotels & Resorts, the hospitality arm of Damac. The 38-storey tower in Jumeirah Village will comprise 742 keys, with furnished units ranging from studio, one-, two- and three-bedroom apartments.
Also, in the heart of the Akoya Oxygen master development, Damac has launched a collection of hotel spa villas. The limited edition hotel spa villas come with a private garden spa as standard, providing a choice of jacuzzi or sauna, and are fully furnished, in addition to being serviced.
Sajwani concluded: “At Damac, we have established ourselves as a market leader firmly positioned in the luxury real estate sector. 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 with a range of properties and offers to address most sub-segments of our target customers.
With the first half of 2016 behind us, we are more optimistic about the business and expect to end 2016 in a more positive position.”