Dubai: Revenues came in higher for Damac Properties at Dh5.8 billion in the first nine months, against Dh5.12 billion a year ago, but net profit took in a decline to Dh2.3 billion from Dh2.84 billion. Gross profit was at Dh2.9 billion.
But there were enough signs of a strong and sustainable income flow for the medium-term, with booked sales at the end of nine months at Dh6 billion, a sharp 13 per cent gain over the comparable 2016 number. On the delivery side of things, Damac is maintaining a good pace, handing over 1,923 homes, including 852 units outside of the UAE
Total cash and bank balances were at Dh7.9 billion, while gross debt stood at Dh5 billion as at September 30.
On whether the slippage in net profits was turning into a concern, Adil Taqi, Chief Financial Officer, said: “There will always be some thought … but it should be looked in the overall context of our numbers. And what we see there are a strong sales flow through the quarter and a pipeline of projects coming up for delivery.
“If we remove the Saudi and Jordan projects delivered during the quarter, where margins are in the 25 per cent range, that in Dubai remains at above 50 per cent. Those are the numbers we are watching quite closely and they are in positive territory. The key for us in the future is the extent of de-risking we can achieve on the cash flow.”
Damac’s sales pipeline has been a beneficiary from its continuous round of off-plan launches, which comes alongside a general improvement in investor activity across Dubai’s property market.
According to Hussain Sajwani, Chairman of Damac, the market has been “steadily solidifying in 2017, with increasing sales transactions and robust fundamentals, and our medium to long term outlook remains positive. We have a strong value proposition and continue to appeal to a broader spectrum of buyers with a range of products at attractive price points.”
Specific to the third quarter, Damac launched its Just Cavalli branded homes, with the first phase clicking well with the intended buyer base.
Construction continues on about 6,300 villas at Akoya Oxygen and the 18-hole championship golf course. It was also during the last quarter that Arabtec Construction was awarded a Dh628 million contract for the design and construction of the main works for 1,296 villas at the golf community.
Damac ramps up on non-UAE handovers
Of the 1,923 units handed over in the first nine months, 454 were at the twin-tower residential and hospitality project Damac Exclusive in Riyadh. There were also the 398 units at The Heights in Amman, its first project in Jordan, and made up of three towers.
During the third quarter, DAMAC also significantly ramped up its leasing activities, with a rental portfolio of apartments at Damac Hills, 95 per cent of which have been leased to date.