Dubai: Union Properties, the Dubai developer, slipped into Dh11.37 million in nine-month 2022 losses, against a Dh1.36 million profit last year. But there were revenue gains to Dh305.69 million and up from Dh296.01 million a year ago.
The developer of Motor City and Green Community has been working on a turnaround strategy under a new Board of Directors this year, and got some relief from working out a debt refinance deal recently.
"During the nine-month period ended 30 September 2022, the Group hasn’t entered into a sale and purchase agreement with any related party, in comparison to the previous period (when) the Group entered into a sale and purchase agreement with a related party to sell investment properties with a carrying value of Dh172.8 million (for a consideration of Dh127 resulting in a loss of Dh45.8 million)," UP said in its financial statement.
The developer is taking action on multiple fronts, including debt renegotiation and pursuing claims against some former BoD members. According to market sources, much will however depend on what the company intends to do with its land bank or completed assets such as the Dubai Autodrome. Under the previous management, the company had considered a potential sale of the Autodrome.
According to Amer Khansaheb, Board member and Managing Director, “We maintained our strong growth trajectory in the third quarter building on the positive momentum in the first six months of 2022. We are continuing to see the positive benefits of our business 'Turnaround Strategy' and remain confident that we will see further progress in the months ahead.
"We remain focused on driving growth and delivering cost efficiencies, particularly at a subsidiary level. Looking ahead, we are cautiously optimistic as we explore several development options that we expect to generate long term value for our investors.”
The completion of our Dh595 million debt restructuring and continued progress with the streamlining of our business places us on a firm footing to pursue new growth opportunities. With a positive outlook for the UAE real estate sector, land banks in highly sought-after locations, and a well-established brand known for delivering high quality communities, we are in a strong position to evaluate new development opportunities that will drive the future growth of Union Properties
Union Properties’ accumulated losses now come to Dh2.39 billion, representing 68.52 per cent in the losses-to-capital ratio. “The losses are mainly a product of significant provisioning,” said the developer. It includes fair value losses of Dh2.07 billion related to investment properties in 2017.
Union Properties Board of Directors intends to:
- Present a recovery plan for handling the accumulated losses.
- (Had) developed a business that focusses on closing out existing projects and refocusing the company on its core business activities to win new projects.
- Develop continued efforts to acquire more projects in the UAE.
- Potential listing for certain subsidiaries.
- Development of assets with recurring cash flow.
- Recover outstanding receivables (notably through court and arbitration).