By: Mahmoud Gamal
Dubai-Mubasher: The UAE’s listed real estate firms posted a 1.4% decline year-on-year in their combined second-quarter profits, according to analysts.
The companies’ profits totalled AED 2.55 billion ($694 million) in Q2-16, compared to AED 2.58 billion ($702 million) in Q2-15.
Revenues rose 2% to AED 10.47 billion ($2.85 billion) in Q2-16 from AED 10.27 billion ($2.79 billion) in the year-ago period.
Most real estate developers posted strong financial results in Q2, but Drake and Scull International’s (DSI) losses negatively affected the overall profits posted during the period, said Manaf Al Mallouhi, head of research at Elite Financial Services.
DSI incurred AED 225.86 million losses in Q2-16, against profits of AED 6.16 million achieved in Q2-15.
Operating losses incurred during Q2 this year showed that DSI sold the projects it entered into for less than their actual cost, Fady Al-Ghattis, CEO of Think Financial Services, said.
The listed real estate firms’ operating losses reached AED 208.23 million in Q2-16, compared to AED 15.92 million in Q2-15.
Arabtec Holding trimmed its losses by 80.45% year-on-year to AED 194.77 million in Q2-16.
Commenting on Arabtec’s performance, Al-Ghattis said that the company’s main problem was that it did not generate any operating profits till now.
Some companies like Damac Properties and Eshraq Properties pressured down the property’s sector profits, Al Mallouhi noted.
Damac’s profits retreated 38% to AED 886.83 million in Q2-16, weighed down by a 24.4% decline in its revenues to AED 1.75 billion and a 19% rise in its financing costs to AED 43.12 million.
Eshraq Properties reported a 35.3% decrease in its profits to AED 1.58 million as its revenues slid 16.4% to AED 1.13 million, and sales and marketing expenses surged 816.3% to AED 317,740.
On another note, gulf market analyst Tarek Ghanem said that despite fluctuating global economy and oil prices, major companies like Emaar Properties, Emaar Malls Group (EMG), Aldar Properties and Union Properties (UP) managed to report positive profits on the back of higher revenues from projects.
Emaar’s profits grew 7.7% to AED 1.27 billion in Q2-16, compared to AED 1.18 billion in Q2-15. The profit rise was backed by an increase in revenues and finance income by 6.6% and 128% respectively.
EMG generated profits of AED 457.90 million in Q2-16, up 11.3% to AED 411.53 million in Q2-15. Likewise, Aldar’s profits grew 8.8% to AED 654.20 million in Q2-16, compared to AED 601 million in Q2-15.
UP achieved profits of AED 71.74 million in Q2-16, a 270.5% surge from AED 19.37 million in Q2-15. In addition, RAK Properties’ profits increased 157.2% to AED 20.16 million in Q2-16 from AED 7.84 million in Q2-15.
Translated by: Julian Nabil
