Dubai: The Dubai developer Union Properties is making progress on putting as much distance between its spate of losses and the recent gains it's been having. For Q1-2023, the company saw net profit total Dh12.3 million from a Dh12.5 million loss a year ago - and thus adding another positive to its attempts to restructure, sell off around Dh1 billion worth of assets, and secure a viable future.
Revenue from contracts with customers rose to Dh122.1 million, up 16 per cent, as group 'subsidiaries continued to deliver robust performance improvements'.
Plus, there are benefits coming from lowering costs, raising efficiencies. The admin and general expenses declined 21 per cent year-on-year to Dh16.6 million and that meant the operating profit was up 335 per cent to Dh19.8 million.
Union Properties still has accumulated losses of Dh2.8 billion, which as a percentage of the capital is 67.7 per cent.
Amer Khansaheb, Managing Director of Union Properties, said: “We continue to make strong progress with the implementation of our turnaround strategy, building on the significant milestones achieved the previous year. The successful execution of our strategy is evidenced by Union Properties’ return to net profitability and its impressive 335 per cent increase in operating profit during the quarter.
“We will continue to focus on driving efficiency across the group to support sustainable profitability improvements and cash flow generation. We are now in a strong position to deliver long-term value creation for our shareholders by leveraging our deep expertise, reputation, and highly sought-after land bank locations to drive growth.”
The company is evaluating opportunities to leverage its highly sought-after land bank locations, including 'potentially launching new developments in the near future'.
What Union Properties is doing on the accumulated losses
- Restructure outstanding debt to reduce finance cost.
- Presented a recovery plan to the SCA and The Market.
- Developed a business plan that includes focussing on closing out existing projects and refocussing on core activities to win new projects.
- Continue efforts to acquire more projects in the UAE.
- Improve operational efficiency.