By: Amr Adel
Dubai – Mubasher: Damac Properties is expected to post annual profits similar to 2016, according to the company’s chief financial officer (CFO) Adil Taqi.
The company reported a 18.2% rise year-on-year in its profits to reach AED 3.7 billion ($1 billion) in 2016.
Revenues are expected to stabilise this year at the same level of AED 7 billion ($1.9 billion) achieved in 2016.
Last year’s results were “satisfactory” amid the challenges real estate companies had faced, not only in the UAE but also in the Gulf region, like lower oil prices.
The company plans to deliver 2,700 units in 2017 like last year, he said, adding that 2,000 out of the total handovers were from Paramount Tower in Downtown Dubai.
The company’s current liquidity stands at AED 8 billion, of which AED 1-1.2 billion are at the administration’s disposal to fund projects, while the remaining amount is in escrow.
The company may issue new sukuk in line with the maturity date of a AED 367.26 million sukuk in March, of which it has already paid off AED 91.815 million. Other sukuk worth AED 2.387 billion will mature in April 2019.
The property developer’s total debts maturing over two years amount to AED 3.8 billion.
Damac is always considering debt markets to provide funding for projects, Taqi said, adding that the company may have additional debt worth $260 million in 2017.
The company’s policy is that total loans should not exceed AED 5 billion. The Dubai-based developer plans to cut its debts to $700 million within 3-4 years.
The company’s collections from the property market fell to AED 5.2 billion in 2016 from AED 7.4 billion a year earlier, due to a decline in sales.
Damac is committed to distribute 25% dividends for 2016.
The developer's board set a minimum 25% cash dividend target in 2014 for the following two years; however, it is yet to announce dividends for 2016.
More than 90% of the total revenues are still generated from Dubai’s property markets, Taqi added.
The UAE property market is likely to move sideways in 2017 as compared to 2016, he concluded.
Translated by: Julian Nabil
