Dubai-listed developer Damac Properties, whose chairman is a business partner of US President Donald Trump, posted 58 per cent drop in full-year 2018 profit, missing analysts' estimates as revenues dropped.
Net profit for 12-months ending December 31, slumped to Dh1.15 billion, the company said without giving a reason for the decline in a bourse filing to Dubai Financial Market, where its shares are traded. The full-year earning was the lowest, since Damac shares started trading in 2013, missing the lowest profit projection of analysts polled by Bloomberg.
Damac’s revenues dropped 18 per cent to Dh6.1bn at the end of last year, while total assets remained relatively unchanged year-on-year.
“We have worked closely with our partners to meet our commitments,” said Hussain Sajwani, Damac chairman, adding that the ongoing public initiatives by the UAE leadership are supporting the property sector’s recovery.
Damac has struggled to maintain profit growth in the past few quarters in the wake of more projects coming online and softer property market conditions. The company, like other developers, is realigning its business priorities to save costs and continue to deliver projects to maintain healthy revenue streams.
Damac has stopped buying land for new developments but the company is open to joint ventures with other developers and land owners, Adil Taqi its chief financial officer told The National in November.
“We have decided for the foreseeable future that we are not buying land. If somebody has got land in a location where we are attracted to, we would [form] a joint venture with these people,” he said at the time.
Last year, Egyptian investment bank EFG Hermes projected operational and financial challenges would put pressure on Damac in 2018 and cash flow issues at the company would send dividends lower, forcing the developer to possibly try and raise debt to meet Dh2.2bn in repayment obligations.
“Next year is going to be another difficult year,” Mr Sajwani said at a World Economic Forum event in Dubai in November. I would hope by the end of 2020, or 2021, we start coming out of this slowdown.”
The company said it booked sales of Dh4.3bn in 2018, while its assets stood at Dh25.2bn. Shareholders’ reached Dh14.1bn at the end of last year.
In 2018 Damac delivered over 4,100 units, the highest number of units completed by the company within a calendar year.