Damac’s Q2 profit drops 87% as revenue declines and expenses rise

The company’s revenue dips to Dh971m and expenses widen to Dh238m

Damac Properties, reported a 86.6 per cent slide in its second-quarter net profit due to rise in costs and expenses. Chris Whiteoak / The National

Dubai's Damac Properties reported a 87 per cent slide in second-quarter net profit on the back of lower revenue and rising expenses as well as costs.

Net profit attributable to the owners of the company for the three-month period ending June 30 dropped to Dh50.6 million, the company said on Wednesday in a statement to the Dubai Financial Market, where its shares trade. Revenue plunged 46 per cent at the end of the second quarter to Dh971m from the same period a year earlier, while expenses increased to Dh238m.

"We remain financially robust, and with the UAE economy poised for growth in the coming years, we are looking forward to an upturn in the real estate sector," said Hussain Sajwani, chairman of Damac Properties.

He also said the company will continue to focus on deliveries this year, completing and handing over projects that are in the development pipeline.

“We have made significant progress in our master communities, Damac Hills and Akoya, and both communities are welcoming many more residents this year,” Mr Sajwani said,

Damac delivered 1,476 units in the first half of the year including the first ever handover in Akoya, the company’s largest master development, with nearly 315 units in the Claret cluster completed and in the process of being handed over to customers.

Damac also completed two other projects in Dubai, namely Ghalia and Tower 108, it said.

The company has reduced its gross debt by Dh1.4bn in the past 12 months. As of June 30, gross debt stood at Dh4.1bn, cash and bank balances stood at Dh5.6bn, Damac said.