Union Properties reports $61m loss in 2019, as revenues drop by 15.5%
Accumulated losses totalled $583.2m on account of correction of GFA and decline in the fair value of real estate portfolio
Dubai Financial Market-listed (DFM) property developer Union Properties has reported a net loss of $61m (AED224m) for the year ended on 31 December 2019, with accumulated losses for the year having totalled to $583.2m (AED2.1bn) in the same period.
In a stock market filing the developer, which is working with China National Chemical Engineering Limited (CNCEC) for the Dubai Autodrome expansion project, said that the group revenue as of 31 December 2019 reached $115.3m (AED423.4m) gliding 15.5% compared to $136.4m (AED501m) in the same period the previous year.
Meanwhile, the developer had recorded a net profit of $17m (AED62.3m) in 2018.
Revealing reasons for the accumulated losses, Union Properties said: “The accumulated losses mainly contributed by the fair value loss of $565.2m (AED2.076) bn related to investment properties recorded in the year 2017.”
The company said that it was on account of correction of the gross floor area (GFA) and decline in the fair value of real estate portfolio.
In 2017, the developer also recorded an impairment of $136.9m (AED503m) on the opening balance of retained earnings as of 1 January 2016, which was related to “a suspected irregularity and error identified for a transaction in the year 2015”.
In order to address the accumulated losses the company said that it has been in the process of developing its land bank and creating assets with recurring cashflows.
It added: “The losses are predominantly due to the valuations of the real estate portfolio, which are marked to the market. These losses will be recouped in the event of an increase in the prices of lands in Dubai.”