Damac’s full-year loss widens as sales drop amid pandemic
The company’s revenue jumped 7% to Dh4.7bn last year
Dubai's Damac Properties, which owns and operates the Middle East's only Trump-branded golf club, reported steeper losses in 2020 as sales plummeted amid the coronavirus pandemic, despite a rise in revenue.
Net loss for the period ending December 31 rose to Dh1.03 billion ($280.64 million), from Dh37m reported during the same period in 2019, the company said in a regulatory filing to the Dubai Financial Market, where its shares trade. Property sales declined 26 per cent annually to Dh2.3bn.
Revenue, meanwhile, jumped 7 per cent year-on-year to Dh4.7bn.
“The lasting effects of Covid-19, which has devastated economies across the globe, has understandably impacted the profit margin at Damac,” the company said on Sunday. “With global lockdowns, travel restrictions and the dip in global travel, Dubai's property market has been adversely affected.”
The real estate market in the UAE slowed in the wake of a three-year oil price slump that began in 2014. Prices have since remained under pressure due to oversupply concerns.
The pandemic, which forced border closures and crippled air travel last year, further pressured the market in 2020, affecting real estate sales. Property prices dropped 8 per cent year-on-year in Dubai and 4 per cent in Abu Dhabi during the fourth quarter, according to a recent report from JLL.
Lockdowns across Europe to stem variant strains of Covid-19 have also had a dire effect on tourism, "which has been a critical force that drives Dubai's economy and boosts its property market”, Hussain Sajwani, chairman of Damac, said.
“However, I anticipate it will take at least 12 to 24 months to see a substantial recovery."
Damac, however, is pressing ahead with expansion plans in other markets. Last year, the developer doubled its share in London’s Nine Elms tower to 40 per cent as part of its expansion plans. The majority of the Nine Elms project is owned by Dico Group, a private company owned by Mr Sajwani.
Damac’s total assets dropped 11 per cent to Dh21.1bn at the end of last year, while its gross debt stood at Dh3.2bn, it said in the statement.
Published: February 14, 2021 11:13 AM