RAK Properties makes no sales Q1 2009

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NO SALE: RAK Properties has revealed it made no sales in the first quarter of the year. (Getty Images)

RAK Properties, founded by the government of Ras Al Khaimah, revealed on Thursday that it made no sales in the first quarter of the year.

The company, which is an Abu Dhabi listed real estate firm, made the surprise revelation as it posted a 38.5 percent fall in first quarter profits.

“In general the property buying has come to a halt and we did not achieve any sales during the first three months of 2009,” the company said in a statement posted on the Abu Dhabi bourse website.

“We are accelerating project development and aiming to deliver certain properties during the year 2009 and recognize the revenue in 2009,” it added.

Net profit in the three months ended March 31 fell 38.5 percent to AED70m ($19.1m) from AED114 million in the corresponding period last year in the wake of the global crisis that has seen a slowdown in the real estate sector .

The company said its participation in Abu Dhabi’s Cityscape Exhibition and other sales and marketing activities are expected to yield sales in the second quarter of the year.

It has also appointed a "renowned business consultant" to review its current operations and to come up with a future business plan.

"Currently, our funds are channeled towards project completions and we will take up further expansion after reviewing recommendations expected out of the bnusiness strategy review and revision study," it added.

The Ras Al Khaimah government listed RAK Properties on the Abu Dhabi Securities Exchange in 2005 and holds a 45 percent stake in the company.

Shares have lost 67.8 percent of their value in the last year, giving the company a market capitalization of AED1.32bn ($359m) at Wednesday’s close.

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READERS' COMMENTS

Disclosure
Posted by Terr, Abu Dhabi, UAE on Sunday 26 April 2009 at 08:40 UAE time


You all seem surprised at the honesty of RAK for disclosing the 'truth'. Hasn't anyone heard of the ADX/SCA regulations that require disclosure of financials of listed companies at the publish of quarterly financials? Honesty is always the best policy. Others not subject to these disclosure rules should pay heed.

RAK Properties
Posted by Mohamed Djirdeh, Dubai, UAE on Sunday 26 April 2009 at 07:13 UAE time


This straight, full disclosure is what has and is missing in the U.A.E property market. Congratulations. I hope the authorities will make developers to be fully transparent. Lack of transparency is hurting the U.A.E property market. Most customers including me are not getting any information!

Good RAK Properties

Start of Professionalism
Posted by IncidentFlux, Ajman, U.A.E. on Friday 24 April 2009 at 13:35 UAE time


Yes! This kind of candid disclosure is a very good start, and shows mature Professionalism. Ajman / Dubai based companies need to learn from these kind of sincere actions, not just talk the talk, but walk the walk.

HONESTY IS THE BEST POLICY
Posted by Jasim Parker, Sharjah, UAE on Thursday 23 April 2009 at 20:45 UAE time


This very old proverb, which for some reason has been abandoned by todays business community, has once again been brought to the forefront by RAK Properties.

RAK Properties you deserve to be honoured for following this proverb sincerely in your business activity. I salute the Honourable Chairman, Board members, Management and Staff of RAK Properties for being very very honest in their business.

This honesty will benefit your organisation in the long run as you will surely win the hearts of more clients. As a client, "Honesty" is one of the biggest criteria when investing funds with developers.

You dont even need to appoint "renowned consultant" for evaluation of your business strategies as you are already honest in your dealings.

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