Dubai-listed developer Deyaar reported an 85 per cent slump in its first-quarter net income, dragged down by a “precautionary” provision for property investments as the company also looks to restructure its capital base to eliminate accumulated losses.
Net profit for the three-month period ending March 31, fell to Dh2.59 million, the company said in a filing on Sunday to the Dubai Financial Market, where its shares trade.
It made a “precautionary” provision for impairments of Dh10m for some investment properties. Impairment against trade receivables, contract and other financial assets climbed to Dh1.56m from Dh1.13m at the end of the last quarter, it added.
Deyaar said its quarterly revenue fell more than 43 per cent to Dh98.8m, while expenses rose about 16 per cent to Dh44m.
Saeed Al Qatami, chief executive of Deyaar, said 2020 has brought with it an “unprecedented pandemic that had its impact around the world”, however, the company remains committed to delivering integrated real estate projects and services despite challenges.
Shareholders of Deyaar in April approved the company's plan to restructure its capital, a move that will help it write off its accumulated losses and boost finances.
The company also secured approval from UAE's Securities and Commodities Authority to reduce its capital from Dh5.78 billion to Dh4.55bn, Deyaar said at the time.
The capital restructuring plan will cancel 21.3 per cent of the company’s shares, a move that will be completed in accordance with the Commercial Companies Law, the Company’s Article of Association, the rules and regulations of the SCA and all of the authorities’ related regulations, it said.
In February, Deyaar reported a 49 per cent slide in full-year profit for 2019 due to a decline in revenue and higher expenses. Established in 2002, Deyaar - in which Dubai Islamic Bank holds a majority stake - has developed a number of projects in Dubai including in Business Bay, Dubai Marina, Al Barsha and Jumeirah Lake Tower, among others.
