By Staff writer
Company on Sunday revealed net loss of $32.7m for first quarter of the year
Chairman of Dubai-based developer Damac Properties Hussain Sajwani believes the current coronavirus pandemic will impact prices and demand for property.
It comes as the company reported a net loss of AED120 million ($32.7m) for the first quarter of 2020, compared to a AED31m ($8.4m) profit for the same period last year, which has been attributed to “non-cash items”.
Sajwani said profits were hit by the provision for impairment on development properties amounting to AED130m ($35.4m), provision for impairment on trade receivables (AED53m - $14.4m) and “loss on fair value” of financial investment (AED14m - $3.8m) “due to prevalent market conditions”.
He has also warned of the inevitable impact of coronavirus on future results. “We have assessed the potential impacts of the outbreak on our operations due to the restrictions placed by various governments to curb the spread of Covid-19. This will likely impact the prices and demand of properties, expected credit loss from trade receivables and contract assets and the fair valuation of financial investment.”
Damac’s revenues for the first quarter of the year reached AED1.2 billion ($326.8m).
In a release through the Dubai Financial Market it was also revealed that sales worth AED733 million ($200m) had been booked over the first three months of 2020 – while over 650 units were delivered in its Akoya master community
Total assets were worth AED23.3bn ($6.3bn), compared to AED23.8bn ($6.5bn) at the end of December last year.
The company was also able to reduce its debt by AED362m ($98.6m) – its gross debt is reported as AED3.5bn ($953m).
Sajwani said: “In 2020 we will remain focused on delivering projects that are already in our development pipeline. Our strategy is aligned with the overarching need to create a balance between supply and demand in Dubai’s real estate market.”