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Dubai's Union Properties swings to $8.4mln net loss in Q3

November 23, 2021
islamic finance

Nine-month accumulated losses at nearly 47% of capital

Dubai-based Union Properties, one of the UAE's biggest developers, reported a net loss of 31 million dirhams ($8.44 million) for the third quarter of 2021 against a net profit of 509 million dirhams a year earlier.

For the first nine months of the year, net profit came in at 1.36 million dirhams, down from the 348.77 million dirhams recorded in the same period in 2020, the developer said in a statement to the Dubai Financial Market (DFM).

This was mainly due to the drop in the “gain on fair valuation of investment properties” to 78.85 million dirhams, compared with 821.99 million dirhams in the same period last year.

Accumulated losses for the nine-month period reached 1.95 billion dirhams, representing 46.7 percent of the capital, Union Properties said.

During the nine-month period, investment properties with a carrying value of 244.4 million dirhams were sold for 226.5 million dirhams, resulting in a loss of 17.9 million dirhams, according to the statement.

The financially troubled developer said it would address the issue of accumulated losses through various measures, including restructuring of its outstanding debt to reduce the finance cost, recovery of outstanding receivables and continued reduction in operating costs.

It said that the “accumulated losses are predominantly due to variations in the valuations of its real estate portfolio (marked to market). These accumulated losses could potentially be recouped in the event of an increase in the prices of lands in Dubai.”

Earlier this month, Union Properties’ chairman, Khalifa Al Hammadi, was dismissed from the company's board after the UAE attorney general announced an investigation into allegations of financial violations by him and other officials of the company.

zawya

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