Dubai: Union Properties slipped into losses totalling Dh218.8 million against net profits of Dh62.32 million a year ago.
Bank financing costs related to subsidiaries’ loans “contributed significantly” to achieving net losses last year, “which are currently being settled,” the Dubai headquartered developer said in a statement issued to Dubai Financial Market.
The company instead focussed on the silver lining – that despite the “stagnation” in the real estate sector, the “Group was able to achieve revenues exceeding half a billion dirhams”.
Indeed, revenues were at Dh535.5 million, through down from Dh762.08 million in 2018.
It was last month that Union Properties issued a partial turnaround plan, built around a Dh200 million expansion of Dubai Autodrome. It also envisaged turning the destination into a standalone company. The developer added that it was negotiating a MoU with China National Chemical Engineering Ltd. for the expansion. No timeline had been specified. Two other subsidiaries were also to convert into private companies.
While there was speculation about even higher losses for 2019, shareholders will not be breathing easy. For that, Union Properties Board of Directors will need to show proof of concept that its plans will indeed change the fortunes of the company.