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CHALLENGING MARKET CONDITIONS

Damac's nine-month net profit falls 23pc to $773m

DUBAI, November 7, 2016

Damac Properties, a leading developer of high-end properties in the Middle East region, has reported a net profit of Dh2.84 billion ($773 million) in the first nine months, down 23 per cent over the same period last year.

Announcing the financial results for the nine months ending September 30, Damac said its recorded revenues stood at Dh5.12 billion ($1.39 billion) with a gross profit margin of 57 per cent.

The total assets increased to Dh24.34 billion at September 30, 2016 compared to Dh23.45 billion at December 31, 2015, it stated.

According to Damac, the cash and bank balances stood at Dh8.9 billion, whilst development properties were recorded at Dh9.79 billion, as of September 30. The net cash generated from operating activities totaled Dh537 million.

With an accelerated delivery momentum in its Dubai core market, Damac has reported the delivery of over 800 units in the third quarter at Akoya by Damac development, bringing the total deliveries for the nine months of 2016 to over 1,300 units.

The Dubai developer said although some international projects are facing unforeseen delays, management still expects to meet the lower end of the guidance range of 2,700 to 3,000 units from incremental deliveries in Dubai.

During the reporting period, booked sales soared to Dh5.3 billion.

According to Damac, the third quarter profit hit Dh1.7 billion, registering a five per cent sequential growth versus the previous quarter and marginally below the same period last year.

On the results, Hussain Sajwani, the chairman of Damac Properties, said: "With these results and the seasonally strong fourth quarter, the management is aiming for full year sales of more than Dh7 billion."

He pointed out that despite the global economic conditions, the Dubai market remains resilient and the levels of interest in its new product launches and existing portfolio are healthy.

In the first nine months, Damac added Aykon City - a landmark in freehold developments in the most sought-after location on Sheikh Zayed Road - to its portfolio of standout projects.

Furthermore, the Dubai developer continues to introduce innovative concepts with its master projects, Akoya by Damac and Akoya Oxygen.

"The market is definitely challenging, investors today are seeking better value. However, with a medium- to long-term view, we believe that Dubai is well positioned for continued growth, and we expect the city to consistently outperform more established metropolitan centres around the world," remarked Sajwani.

"This outperformance is underpinned by ambitious infrastructure investments, and 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," he added.

In the third quarter, Damac continued to bring new products to market. Aykon City - a four-million-sq-ft development comprising six towers, located on Sheikh Zayed Road and overlooking the Dubai Canal - remains the major launch of the year.

At Cityscape too, the Emirati developer launched the much-awaited 80-storey Aykon Hotel and hotel apartment tower.

Sajwani pointed out that 2016 will be remembered not only as the year of market turmoil and macroeconomic pressures, but "importantly for us the year when the community at Akoya by Damac became a reality with the delivery of 1,350 units."

"A testament to our ambition, capabilities and execution. 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," he added.-TradeArabia News Service




Tags: Dubai | Damac | property | profit |

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