DUBAI
Damac Properties’ net profits slipped below Dh1 billion to Dh880 million for the first three months of 2017 compared with a Dh1.05 billion tally during the same period last year. But the top-line numbers were quite favourable for the master-developer, with revenues of Dh1.95 billion (against Dh1.62 billion in first quarter of 2016) and booked sales of Dh2.2 billion (Dh2 billion last year). The Damac numbers further confirm that Dubai’s master-developers have had a solid start to the year and that their inventory is finding more buyers coming in. In its statement to Dubai Financial Market, the developer also reported healthy gross profit margins of 54 per cent for the first quarter. (It was also the quarter which saw the developer open the doors to the first Trump-branded golf course, and with the US President’s sons present to do the honours.) “As we highlighted in our financial year 2016 results, the Dubai real estate market has stabilised,” said Hussain Sajwani, Chairman of Damac, in the statement. “With no major fluctuations in prices, but with an increase in volumes and transactions in the market, we can say first quarter of 2017 has been strong.”
Sajwani shrugs off the dip in the company’s net profits, saying that it is a factor of the property market emerging from what has been a challenging period. “And I’m not the sort who will be disappointed with Dh880 million in net profits. The main point is that Damac will maintain the same momentum in terms of off-plan launches and sales during the second quarter (despite the approaching Ramadan period and then immediately followed by summer). We are on track to maintain full-year projections on sales, which we had set at Dh7 billion.”
Damac is concentrating on Aykon City development on Shaikh Zayed Road overlooking the Dubai Canal.
During the first quarter, Damac kept its foot on the pedal in maintaining a steady off-plan launch schedule. The main focus continues to be on individual components within the two Akoya developments, as well as along the Dubai Water Canal, where it has the Aykon City. (At Akoya, now rebranded as Damac Hills, it completed an additional 550 homes, which is around 20 per cent of the full-year projection of 2,800 units.) The gross profit margin of 50 per cent during the first quarter of 2017 plus portends well, as does the 45 net profit margin. “The land bank we have will last us for another four years — but having said that, if opportunities to buy more present themselves, we will do so,” the Chairman added.
“The start of 2017 has been promising and we will continue to innovate on products to meet the demands of a wider audience of customers.”
Outside of the UAE, “the focus will be on the other Gulf markets (where it is present in Saudi Arabia and Qatar). And we continue to explore the possibility for a second project in London.”
On whether there was a chance the overseas foray could extend all the way to the US, Sajwani said: “Not for the time being ... but if there were better tax breaks/incentives…” (Damac has one ongoing project under development in London.) The need to top up its debt does not exist, he added, having just gone through a $500 million (Dh1.84 billion) sukuk exercise.
BOX — Key numbers firm up for Damac
• At the end of the first three months, total assets gained 6.3 per cent to Dh26.17 billion against the Dh24.63 billion at the end of last year.
• As of March 31, cash and bank balances stood at Dh9.11 billion; development properties of Dh10.22 billion remains largely unchanged versus December 2016. Total equity was Dh13.5 billion, a gain of 7 per cent from year-end 2016.
