Chairman Hussain Sajwani blames soft market conditions as revenue drops 28%
Dubai-based Damac Properties has revealed a $10 million (AED37m) loss for 2019, blaming softer market conditions throughout the industry, both in the emirate and globally.
The loss represents a swing from a AED1.152 billion profit for 2018 and a profit of AED2.76bn from 2017. It’s also the first time the luxury developer has posited an annual loss since become a publicly listed company in 2013.
In a note to Dubai Financial Market (DFM), Damac chairman Hussain Sajwani said profit was adversely affected by non-cash items such as impairment on development properties worth AED124m and impairment on trade receivables totalling AED41m.
Revenue for the year also fell from AED6.132m for the previous 12 months to AED4.399m.
Sajwani, said: “Real estate is a cyclical industry across the globe; the Dubai real estate market like others in the world witnessed softer market conditions in 2019, this also impacted the financial performance of Damac.”
Damac Properties delivered 4,700 units through 2019, up from 4,100 delivered in 2018, while booked sales stood at AED3.1bn, down from AED4.3bn the previous year.
“To safeguard the interest of our stakeholders, we have substantially reduced new launches over the last few years to avoid adding new capital commitments. We have focused on selling completed and near completion inventory in 2019 and would continue to do so next year as well,” added Sajwani.
Damac did, however, pay down a debt of AED1.6bn in the last 18 months, with nearly AED 4.6bn in cash and bank as at December 31, 2019.
According to a report from S&P Global Ratings Dubai property prices are falling to levels last seen ten years ago.