Dubai: Damac Properties recorded revenues of Dh4.4 billion for 2019, a steep decline from the Dh6.1 billion it had in 2018. It led to the developer reporting losses for the year of Dh36.87 million against a Dh1.51 billion net profit for 2018.
“We have selectively launched fewer projects in softer market conditions to avoid adding new commitments and focus on selling completed and near completion inventory,” said Hussain Sajwani, Chairman. “Cash and liquidity management remains of paramount importance given the cyclical nature of the industry we operate in.”
Last year, the developer booked sales of Dh3.1 billion, and delivered around 4,700 units. "In Dubai, we maintained our focus on completing and handing over units in our pipeline," said Sajwani. "Damac has historically paid for its land and debt commitments on or ahead of schedule.
"Damac continues to maintain a healthy financial and liquidity position and reduced gross debt by Dh1.6 billion in last 18 months.’’
Specific to the fourth-quarter performance, Niall McLoughlin, Senior Vice-President at Damac, said "Total revenue had grown 80 per cent year-on-year in the fourth quarter. However, financial performance for 2019 was adversely impacted by non-cash items such as provision for impairment on development properties and provision for doubtful debts worth Dh165 million."
Vocal about offplan
The Damac Chairman has in recent months been calling for a complete freeze on offplan launches in Dubai for a one- or two-year period. This, he maintains, is the only way forward for the market to correct itself and not be overwhelmed by an impending oversupply. Even otherwise, developers in Dubai have been going slow on new launches or releases in recent months.
Dubai recently formed a higher committee to come up with recommendations on what's next for the real estate sector. It's findings will be key to what developers plan to do next.