Deyaar reports 49% drop in its full-year profit on lower revenue

The company's board recommended a capital reduction to offset accumulated losses and expects its hospitality projects to increase revenue

Deyaar on Sunday said its first quarter net income slumped on provisions and lower revenue. Reem Mohammed/The National

Dubai-listed developer Deyaar reported 49 per cent slide in full-year profit for 2019 due to a decline in revenue, higher expenses and its board recommended a reduction in capital to offset accumulated losses.

Net profit attributable to the owners of the company for the period ending December 31 dropped to Dh71.5 million, the company said in a filing to the Dubai Financial Market, where its shares trade. Revenue fell 6.21 per cent to Dh603.7m, while expenses rose 10.34 per cent to Dh163.4m. Impairments against trade receivables and other financial assets widened almost 83 per cent to Dh8.3m in the year.

The board discussed capital restructure and recommended cancelling a number of shares and a reduction of the capital to offset the accumulated losses of Dh1.53 billion, after obtaining the necessary approvals as per the regulations of the Securities and Commodities Authority, the company said. In a separate statement, Deyaar said accumulated losses are the provisions for impairment of assets due to a downturn recorded in 2010 and the company adhering to new accounting standards.

Deyaar said it had dedicated recent years on completing existing projects while also launching new projects that yielded high sales and strengthened the company's portfolio of assets.

"The company now has three projects in the hospitality sector which will contribute to increasing the revenues in the coming years," it said.

Deyaar will continue to "launch quality projects, and is also keen to diversify its sources of income through property and facilities management services," it added.

Last year, Deyaar completed Afnan, the first district of its Midtown master development. The handover of Dania district is in progress. The company also began the operation of its three hospitality projects with a total of 1,000 keys last year.

“In 2020, we are planning to move forward with the development of Midtown project and launch new districts with the handover of Bella Rose project by the end of the year,” said Saeed Al Qatami, chief executive of Deyaar.