Developer posts decline in revenue as it stayed away from new projects, focused on existing ones
Union Properties posted a quarterly profit on Wednesday despite a decline in revenue, as the real estate developer stayed away from new projects to focus on existing developments.
The Dubai-listed firm made a third-quarter net profit of AED50m (US$13.6m) compared to a loss of AED1.06bn in the same period of 2011, according to a Reuters calculation.
The company, which reached a AED3.8bn debt deal with major shareholder Emirates NBD earlier this year, did not provide quarterly figures. Profit for the nine months to September 30 was AED156m versus a net loss AED1.5bn a year earlier, the firm said in a statement.
The increased profit reflected "improved market sentiment in the real estate sector", it added.
Union Properties, which has not undertaken new development work in recent years, said its revenue for the nine months dropped to AED1.3bn from AED3.2bn a year ago. The drop occurred because it booked most revenue from selling its Index Tower and Limestone House developments in 2011, it said.
The company was one of many property firms in Dubai that were hit by a property market collapse in 2009-10, which saw home prices plunging by more than half and a large number of projects being put on hold. Recovery has been gradual as heavy supply weighs on the emirate's market.
Dubai's largest developer Emaar Properties reported a 4.7 percent drop in third-quarter earnings last week.
Union Properties' total consolidated bank debt fell 41 percent to AED3.4bn at the end of the third quarter from AED5.8bn a year earlier.
In January, the company said it would transfer assets worth AED1.1bn to Emirates NBD as part of the debt deal, while its remaining liabilities to the bank would be extended until 2017.
The company's shares were up 2 percent after the earnings announcement.