Dubai: The mortgage provider Amlak now has accumulated losses of Dh1.83 billion, most of which related to value declines on investment properties in 2014.
The company recorded a loss of Dh77.83 million for the first six months of 2020, against a profit of Dh4.3 million last year. But, if just the second quarter is taken into account, its profit shot up to Dh58.33 million (against Dh2.67 million a year ago).
"The accumulated loses are mainly due to fair value loss on investment properties recorded in 2014," the company said. "During the period 2009-13, the group held certain investment properties amounting to Dh2.94 billion, which have been carried at cost since acquisition.
"These investment properties were fair valued as at December 31, 2014 and a fair value loss on these properties of Dh1.76 billion was recorded."
Cutting down on losses
In June, Amlak got approval from all its financiers on the new terms for a debt restructuring. This would allow “more flexibility” in adapting to market conditions and “allow the company to develop its business to achieve growth in its balance-sheet”.
"Since 2014, the company has been implementing the restructuring, which allowed for the resumption of normal business activity that enabled successful repayment of 48 per cent of Amlak’s total debt over a period of four years under the 12-year restructuring plan," the statement added.
It was in January 2019 that Amlak went into renegotiations with its financiers on the restructuring terms agreed in 2014 and subsequently revised in 2016.