In 2020, Dubai developer Union Properties had accumulated losses of Dh1.96 billion, which were 45.7 per cent of the capital. The percentage share was disconcerting - but the accumulated losses were predominantly due to variations in valuations of its portfolio.
The firm came through in first quarter of this year, reporting Dh5.6 million in net profit. The company attributed the return to profitability to several factors, including the group’s focus on capturing synergies and debt restructuring. The profit of the developer further increased by a significant 483 percent during the second quarter to Dh26.83 million. The value of the company’s assets increased to Dh6 billion, while financing costs decreased by 32 per cent compared to the same period last year 2020
Sure-footed strategy
Such a stellar performance, including at its subsidiaries, for a second consecutive quarter is significant and reaffirms the management’s assured handling of its turnaround strategy along with the vision to preserve shareholders' rights. The external auditor also dismissed his qualifications regarding a gross floor area concern last year, signaling another positive for the company’s financials.
For sure, the results are reflected in the share price. From the pandemic lows of Dh0.166, the share has almost doubled AED 0.3. Nevertheless, it still trades at a bargain price from its all-time high of Dh3.75
During the quarter ended June 30, Union Properties witnessed a significant shift on many activities, and which confirms it is on track to overcome the adverse effects of the coronavirus. In terms of the future, with Expo right around the corner, the real estate industry is fuelling up. There is no doubt that it will be the biggest contributor in the recovery of the property market in the emirate and its related activities. Union Properties as an integral player in the vicinity of the Expo is surely at position to tap its share of benefits.
