DUBAI: DAMAC Properties, one of Dubai's largest private developers, swung to a net loss of 36.9 million dirhams ($10 million) in 2019 from a profit of 1.15 billion dirhams in 2018, the firm reported on Tuesday.
It is the first annual loss since 2010, according to Refinitiv data. Damac, one of the biggest developers in Dubai that does not have state backing, owns the only Trump-brand golf course in the Middle East.
DAMAC Senior Vice President Niall McLoughlin told Reuters the results were affected by non-cash items including provisions for impairment on development properties and for "doubtful debts" worth 165 million dirhams.
Doubtful debt is money a business is owed by its customers but that it is unlikely to collect.
DAMAC's billionaire Chairman Hussain Sajwani said last year developers in the emirate should stop new residential projects for up to two years to kickstart a recovery in Dubai's troubled market.
Dubai has faced a slowing real estate market for most of the decade, barring a brief pickup more than five years ago. Housing oversupply has driven prices down at least a quarter since 2014.
DAMAC's full-year revenue fell 28.2% to 4.4 billion dirhams as the firm said it focused on handing over units to customers and developing existing projects. "We have selectively launched fewer projects in softer market conditions to avoid adding new commitments and focus on selling complete and near completion inventory," Sajwani said in Tuesday's bourse filing. He said DAMAC had reduced its gross debt by 1.6 billion dirhams over the last 18 months and that the company "continues to maintain a healthy financial and liquidity position." DAMAC had a fourth quarter loss of 169.5 million dirhams compared with a 57 million dirhams profit in the corresponding period, according to Reuters calculations. DAMAC's McLoughlin said total revenue in the fourth quarter had risen 80% year on year. Dubai's government last year announced it was setting up a real estate planning commission to regulate the sector and avoid competition between state-backed and private firms. It is not clear what action the commission has taken since then.
February 12, 2020
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