Damac’s Q1 2017 net profit sees 16% year-on-year dip

Damac Properties achieved a net profit of $240m in Q1 2017, approximately 16% lower than the $285m figure recorded during the corresponding period of last year

Damac’s Hussain Sajwani (above) described the first three months of 2017 as promising.
Damac’s Hussain Sajwani (above) described the first three months of 2017 as promising.

Damac Properties achieved a net profit of $240m (AED880m) in Q1 2017, with net margins of 45%.

This figure is approximately 16% lower than the $285m (AED1.05bn) of net profit recorded by the UAE-headquartered real estate developer during the corresponding period of last year.

During the first three months of 2017, Damac recorded revenue of $531m (AED1.95bn), with gross profit margins at 54%. The company’s total assets increased by 6.3% to $7.1bn (AED26.17bn), compared to $6.7bn (AED24.63bn) at year-end 2016.

Damac reported booked sales of $599m (AED2.2bn) in Q1 2017, and achieved earnings per share of $0.04 (AED0.15).

Commenting on the results, Hussain Sajwani, chairman of Damac, said: “As we highlighted in our [financial year] 2016 results, the Dubai real estate market has stabilised. This was especially visible in the last few months of 2016.

“With no major fluctuations in prices, but with an increase in volumes and transactions in the market in general, we can say Q1 2017 has been strong, with booked sales of AED2.2bn. There is continued demand for quality real estate that presents better value.

“Despite the challenging market conditions, our medium- to long-term outlook remains positive, as we remain dynamic and continue providing the right products that suit the changing market needs.”

The developer completed 550 units within its Damac Hills (previously known as Akoya) master development during the first three months of 2017, representing approximately 20% of its full-year 2017 guidance of 2,800 units.

As of 31 March, 2017, Damac’s cash and bank balances and development properties stood at $2.48bn (AED9.11bn) and $2.78m (AED10.22bn), respectively – largely unchanged from year-end 2016. Its total equity for Q1 2017 stood at $3.68bn (AED13.5bn), an increase of 7% from the end of last year.

“During the quarter, we continued to launch a series of innovative products in our golf community, Akoya Oxygen, that were priced to attract both investors and end users,” said Sajwani. “Customers are seeking properties in premium locations and at an attractive price point, which provides better value in both the case of seeking higher returns in investment or living in a home that is part of a comprehensive lifestyle community.”

Sajwani concluded: “2016 was a year of market stabilisation, and the start of 2017 has been promising […] We will continue to innovate on our products to meet the demands of a wider audience of customers, [and] we will also continue to execute and deliver existing projects with a big focus on shareholder returns as well as customer satisfaction.”

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