At first glance, a property company reporting higher earnings in this climate is reason to celebrate. But on closer inspection, Union Properties is far from out of the woods.
Dubai's third-largest developer yesterday reported a first-quarter increase in net profit to Dh50 million, from Dh30m for the same period last year.
The rise was largely due to the handover of properties in its MotorCity project, a 353 hectare development in Dubai that includes homes, offices and a race track.
The stock jumped 6.8 per cent to Dh0.49. Analysts were less impressed by the results, noting that by aggressively reporting deliveries this quarter, the company eats away at what it can claim in coming quarters. Union also did not release details on default rates, an indicator that analysts are watching closely to see how far through the downward part of its cycle the company seems to be.
For these reasons, UBS maintained a "sell" rating on Union and Nomura stayed at "reduce". Judging by book value, Union trades at a discount of about 60 per cent to its peer group, according to UBS.
There is good reason for this: the company remains in a vicious financing cycle.
After MotorCity, the company has few projects in the pipeline that are nearing delivery. It is selling some assets, including the Ritz-Carlton Dubai, but that money is largely needed to finance its existing debt. The market for external financing is similarly bleak.
While several of its competitors have sovereign support, Union's back-stop is Emirates NBD, which owns a 30 per cent stake in the company. But the bank is dealing with its own challenges related to its heavy exposure to Dubai World's debt.
The best solution for Union may be consolidation. The obvious merger candidate is Emaar Properties, which is owned by the Investment Corporation of Dubai (ICD). ICD also holds a 30 per cent stake in Emirates NBD, giving the investment company an indirect stake in Union.
Without that lifeline, it is hard to see Union Properties delivering much more good news in the short term.
halsayegh@thenational.ae
RESULTS
2.15pm Maiden (PA) Dh40,000 (Dirt) 1,200m
Winner Shawall, Abdul Aziz Al Balushi (jockey), Majed Al Jahouri (trainer)
2.45pm Handicap (PA) Dh40,000 (D) 1,200m
Winner Anna Bella Aa, Fabrice Veron, Abdelkhir Adam
3.15pm Handicap (PA) Dh40,000 (D) 1,200m
Winner AF Thayer, Tadhg O’Shea, Ernst Oertel
3.45pm Handicap (PA) Dh40,000 (D) 1,700m
Winner Taajer, Fabrice Veron, Eric Lemartinel
4.15pm The Ruler of Sharjah Cup – Prestige (PA) Dh250,000 (D) 1,700m
Winner Jawaal, Jim Crowley, Majed Al Jahouri
4.45pm Handicap (TB) Dh40,000 (D) 2,000m
Winner Maqaadeer, Jim Crowley, Doug Watson
BUNDESLIGA FIXTURES
Saturday, May 16 (kick-offs UAE time)
Borussia Dortmund v Schalke (4.30pm)
RB Leipzig v Freiburg (4.30pm)
Hoffenheim v Hertha Berlin (4.30pm)
Fortuna Dusseldorf v Paderborn (4.30pm)
Augsburg v Wolfsburg (4.30pm)
Eintracht Frankfurt v Borussia Monchengladbach (7.30pm)
Sunday, May 17
Cologne v Mainz (4.30pm),
Union Berlin v Bayern Munich (7pm)
Monday, May 18
Werder Bremen v Bayer Leverkusen (9.30pm)
In Search of Mary Shelley: The Girl Who Wrote Frankenstein
By Fiona Sampson
Profile
Israel Palestine on Swedish TV 1958-1989
Director: Goran Hugo Olsson
Rating: 5/5
Heavily-sugared soft drinks slip through the tax net
Some popular drinks with high levels of sugar and caffeine have slipped through the fizz drink tax loophole, as they are not carbonated or classed as an energy drink.
Arizona Iced Tea with lemon is one of those beverages, with one 240 millilitre serving offering up 23 grams of sugar - about six teaspoons.
A 680ml can of Arizona Iced Tea costs just Dh6.
Most sports drinks sold in supermarkets were found to contain, on average, five teaspoons of sugar in a 500ml bottle.
Brief scoreline
Switzerland 0
England 0
Result: England win 6-5 on penalties
Man of the Match: Trent Alexander-Arnold (England)
Teachers' pay - what you need to know
Pay varies significantly depending on the school, its rating and the curriculum. Here's a rough guide as of January 2021:
- top end schools tend to pay Dh16,000-17,000 a month - plus a monthly housing allowance of up to Dh6,000. These tend to be British curriculum schools rated 'outstanding' or 'very good', followed by American schools
- average salary across curriculums and skill levels is about Dh10,000, recruiters say
- it is becoming more common for schools to provide accommodation, sometimes in an apartment block with other teachers, rather than hand teachers a cash housing allowance
- some strong performing schools have cut back on salaries since the pandemic began, sometimes offering Dh16,000 including the housing allowance, which reflects the slump in rental costs, and sheer demand for jobs
- maths and science teachers are most in demand and some schools will pay up to Dh3,000 more than other teachers in recognition of their technical skills
- at the other end of the market, teachers in some Indian schools, where fees are lower and competition among applicants is intense, can be paid as low as Dh3,000 per month
- in Indian schools, it has also become common for teachers to share residential accommodation, living in a block with colleagues