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Fri 30 Apr 2010 09:32 AM

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Deyaar sees Q1 net loss of $27m on provisions

Developer's Q1 gross revenue at AED196m; eyes handing over 5 Dubai projects in '10.

Dubai's second-largest property developer by market value Deyaar reported a first-quarter net loss of 100 million dirhams ($27.2 million) on the back of significant provisions, the company said on Thursday.

Deyaar had achieved a net profit of 53.3 million dirhams in the first quarter of 2009.

Gross revenue for the first three months reached 196 million dirhams, while total equity stood at 6.65 billion dirhams, the group said in a statement.

"The company remains committed to its consolidation and project completion strategy, including the handover of five Deyaar projects in the Business Bay area in 2010," it said.

Deyaar, which rivals Emaar Properties and Union Properties, dismissed its chief executive in April as part of a restructuring plan and appointed Saeed al-Qatami as acting chief.

Its focus on consolidation has "led to a reduced level of defaults and a higher paid-up value for each of the company's sold and consolidated units", Deyaar said.

"Simultaneously, Deyaar continues to follow a conservative and prudent approach, including making significant provisions during the first quarter of 2010," it added.

In February, Deyaar's former chief executive told Reuters the company was on track to hand over six projects in 2010 but it postponed a 500 million UAE dirham distressed property fund that month due to difficult market conditions.

Deyaar launched the fund last summer to buy distressed properties from its own portfolio as well as other properties, as it looked to boost returns for shareholders.

Dubai's once-booming property sector has been hit hard by the global financial crisis as developers slowed or cancelled projects and jobs were slashed. (Reuters)