Dubai-based developer Union Properties swung to a first-quarter profit on the back of lower finance costs as the economy recovers from the coronavirus pandemic.
Net profit for the three months ending March 31 reached Dh5.6 million ($1.52m), compared with a loss of Dh121.9m during the same period last year, the company said in a statement to the Dubai Financial Market, where its shares trade.
Finance costs during the period fell 42 per cent to Dh22.6m and direct costs dropped 6 per cent to Dh77.7m. Administrative and general expenses also fell 15 per cent to Dh25.3m.
“Our results ... represent an encouraging start for this year,” Khalifa Hassan Al Hammadi, chairman of Union Properties, said. “While the world is still struggling to recover from the economic and health implications imposed by the spread of the Covid-19 pandemic, we at Union Properties have sought out to optimise our cash flows by adopting a flexible policy to adapt to the economic changes.”
The company also gained Dh7m on the disposal of investment properties in the first quarter compared to a loss of Dh19.5m during the same period last year, according to the statement.
The UAE “has dealt with the spread of the pandemic and its economic repercussions with a high level of professionalism and grace”, Mr Al Hammadi said. “This success that was attributed to extraordinary measures that balanced the nation, citizens, and residents’ interests has further propelled the nation to become one of the first countries leading the global economic recovery.”
The company, whose projects include Motor City and Uptown Mirdif, reached an agreement with Emirates NBD last year to restructure an outstanding debt of Dh946m. Union Properties also approved the sale of a 40 per cent stake in its subsidiary Dubai Autodrome for Dh400m.
Property prices in the UAE are expected to stabilise in 2021 as the economy recovers from a coronavirus pandemic-induced slowdown and government initiatives spur growth.
New programmes such as visas for expatriate retirees and the expansion of the 10-year golden visa scheme to attract foreign professionals to the UAE are also expected to support the local real estate market.
More to follow…