Dubai: Dubai mega-developer Damac saw revenues touch Dh3 billion for 2021, but sustained a net loss of Dh531 million against 2020's losses of Dh646 million. The results were announced on the final day of Damac shares being listed on DFM.
The 2021 revenues came in lower than the Dh4.7 billion. But Damac will be highlighting its booked sales tally, which at the end of last year was Dh7.8 billion against Dh2.3 billion a year ago. About the profit drop, Damac said “The uncertainty caused by COVID-19 and new variants continued to have ripple effects on the property market, which has subsequently impacted profit margin.”
Today (February 15), Damac will formally request the DFM authorities to de-list the stock. This comes as Hussain Sajwani, the company’s founder, again assumes 100 per cent ownership of the entity. It was last year that Sajwani decided to bring Damac back into private ownership through his investment arm Maple. Offers were made to Damac’s other shareholders for a buyback, and the process was formally closed on February 14.
A revival in the making?
Damac’s booked sales of Dh7.8 billion will be the foundation of its turnaround from two years of losses. The Damac Lagoons’ venture will provide a reading on investor demand for new offplan opportunities. There was also the reviving of a 70-storey high-rise development, through a brand association with Roberto Cavalli.
“Damac has the land bank for more launches, and that should work in its favour whenever it wants to launch the next project,” said a market analyst. “Offplan sales in Dubai are pushing higher, which could convince Damac to consider more niche launches such as the Lagoons and the Cavalli tower.”
Last year, it padded up the land holdings with new acquisitions “to build future project pipeline”. It delivered around 7,400 residential units at Damac Hills and Damac Hills 2 in 2021. (Damac has to date delivered more than 30,000 homes.)
"The company remains cautiously optimistic on its performance in 2022 and will continue to maintain a
responsible approach regarding property launches."
Cut down on debt
Apart from booked sales, Damac’s other big takeaway would be its progress in cutting down the debt on the books. During 2021, the company cut a further Dh500 million off its books. “Damac continues to focus on liquidity and cash management,” it said in a statement.
Gross debt as of end December last was at Dh2.7 billion (against Dh3.2 billion a year before), while cash and bank balances were "largely unchanged at Dh4.1 billion".