Dubai's Damac Properties reported its first full-year loss for 2019 in nearly a decade as revenue fell 28 per cent.
The company, which is the UAE's third-biggest listed developer, reported a loss of Dh36.9 million for the period ending December 31, missing the lowest estimate of analysts polled by Bloomberg, according to a filing with the Dubai Financial Market, where its share trade. The company had reported a profit of Dh1.15 billion for 2018.
"In Dubai, our primary market, we maintained our focus on completing and handing over units in our development pipeline," said Hussain Sajwani, chairman of Damac Properties. "We have selectively launched fewer projects in softer market conditions to avoid adding new commitments and focus on selling completed and near-completion inventory. Cash and liquidity management remains of paramount importance for Damac given the cyclical nature of the industry we operate in."
Despite revenue in 2019 falling to Dh4.4bn, Damac continues to maintain a healthy financial and liquidity position and has reduced gross debt by Dh1.6bn in the last 18 months, Mr Sajwani said.
The company delivered 4,700 units last year and booked sales of Dh3.1bn. Total assets at the end of 2019 stood at Dh23.8bn, compared with Dh25.1bn in 2018.
Mr Sajwani also said the market is poised for a long-term upswing due to various initiatives started by the government such as long-term visas to boost demand. He also cited the Higher Real Estate Planning Committee, created in September, which seeks to rebalance the property market that has softened as a result of excess supply, lower oil prices and a slowing global economy.
“Government initiatives remain a key driver for the sector’s growth,” he said, referring to Expo 2020 which will kick off in October and is expected to boost demand for the property sector.
“The short- and long-term impact of this global event will undoubtedly boost all sections of the economy, which will have a positive impact on the real estate sector," Mr Sajwani said.
Despite the weak performance last year, the Dubai developer, which owns and operates the Middle East's only Trump-branded golf club, acquired two plots in Dubai for a total price of Dh285m. The plots are in Al Sufouh and Business Bay areas.
Damac has also shifted gears and is focusing on international luxury resorts in the Maldives, Seychelles, Bali and Marrakech, Ali Sajwani, the general manager of operations and son of the company's founder, told The National in November.