Damac expects full year sales to exceed $1.9 billion
Dubai's DAMAC Properties reported a 11.7 percent fall in third-quarter net profit on Monday as revenue slipped.
The developer reported a net profit of 902.0 million dirhams ($245.6 million) for the three months ended Sept. 30, according to a statement to Dubai's bourse. This is down from 1.02 billion dirhams a year earlier.
EFG Hermes forecast the firm would make a quarterly net profit of 707.0 million dirhams.
DAMAC's third-quarter revenue was 1.75 billion dirhams. This compares with 2.02 billion dirhams a year earlier.
Damac said it delivered of over 800 units in 3Q 2016 in its Akoya by Damac development, bringing the total deliveries for nine months to over 1,300 units.
The company said that while some international projects are facing "unforeseen delays", management still expects to meet the lower end of the guidance range of 2,700 to 3,000 units from incremental deliveries in Dubai.
Booked sales reached $1.4bn (AED 5.3 billion) for the year, with $463m (AED1.7 billion) recorded during Q3, which represents a 5% sequential growth versus Q2 2016 and marginally below Q3 2015.
With these results and Damac’s seasonally strong Q4 2016, the management said guidance for full year sales will exceed $1.9 billion (AED 7 billion).For all the latest real estate news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
11.7% profit slip could easily turn to a much bigger drop and no amount of gloss can make the profits shine until DLD steps in to restore the goodwill of foreign buyers. Because of bad management of escrow accounts by DLD, about a dozen or so of DEC/Goldline projects, heavily invested by foreign buyers, have been at a standstill for the last 7-8 years. DLD must sort out the mess promptly so that the projects can re-start and foreign instalment money can start flowing back to Dubai as the projects proceed towards completion. There are several other projects in similar situation. Some help from DLD will go a long way in restoring the goodwill of the foreign buyer and that is a small price to pay for restoring the health of real estate in Dubai.