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Damac gains in revenues but drops in net profit

But margins from its UAE portfolio continue to be healthy at 52.1%

Image Credit: Virendra Saklani/Gulf News
A model of Damac’s Akoya Oxygen project at Cityscape Global last year. Construction continues at villas and apartments at Akoya Oxygen, and the golf course is also shaping up.
Gulf News

Dubai

Damac Properties recorded a 4 per cent increase in revenues to Dh7.5 billion but saw net profit down 25 per cent to Dh2.8 billion for 2017 (from Dh3.69 billion). The board has proposed dividend of Dh1.5 billion (at Dh0.25 a share).

But looking at the wider picture, Damac pulled in some sizeable numbers. Booked sales last year were at Dh7.5 billion and up from the Dh7 billion a year ago. The developer was a major beneficiary of the surge in off-plan sales that Dubai’s property market recorded all through last year.

There was a drop in margins, but that was “mainly due to international project deliveries during the year,” the company said in a statement. But its projects in the UAE still command margins of 52.1 per cent, which it deemed “healthy”.

“Dubai’s property market continues to show growth as increasing demand returns to the market, and this is reflected in our booked sales,” said Hussain Sajwani, Damac Chairman. “Our medium- to long-term outlook remains positive, with continued local demand as well and stronger interest by international investors. Our major projects including Damac Hills, Akoya Oxygen and Aykon City continue to appeal to expats and international investors alike.”

Construction continues at 6,500 villas and apartments at Akoya Oxygen, while the golf course is also shaping up. “Dubai’s property sector is feeling the positive effects of the emirate’s appeal,” said Sajwani. “This is evident from the growing sales transactions at Dubai Land Department and we are confident of the growth prospects for the sector going forward.” (The chairman had recently sounded out the possibility of selling a stake in the company to a strategic investor. This could go up to 15 per cent of the promoter’s equity.)

Last year, Damac delivered 2,304 residential units, of which 1,452 units were at the flagship Damac Hills community and 852 units at its overseas projects, including a two-tower project in Saudi Arabia (the Damac Esclusiva — 454 units) as well as its first project in Jordan (The Heights — 398 units) and comprising three towers.

It is also expanding its residential leasing base, principally at Damac Hills. Of the 328 units, 97 per cent have been leased as of end December. Damac also commenced operations at the 305-key Maison Royale The Distinction in Downtown Dubai, bringing the number of hotels in the portfolio to six.

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