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Damac reports 9% decline in gross profits for 2017

A decline in gross margins to 48.8 percent last year from 55.9 percent the previous year, has pulled down Damac Properties’ gross profits by 9 per cent to Dh3.6 billion in 2017, the company said in a statement.

“Margin decline was mainly due to international project deliveries during the year, UAE projects margin remains healthy at 52.1 per cent,” the company said in a statement.Damac Properties reported Dh2.8 billion net profits for 2017.

Earnings per share stood at Dh0.46 for 2017. Damac’s Board proposed dividend of Dh1.5 billion (Dh0.25/share) for year ended 2017 which will be paid upon approval by the relevant authorities, and the shareholders during the general assembly.

However, the company’s total revenue increase 4 percent to Dh7.5 billion in 2017. Total cash and bank balances stood at Dh7.5 billion. Gross debt stood at Dh4.8 billion as at 31 December 2017. This represents a debt to equity ratio of 0.34 versus 0.30 as at 31 December 2016.

Damac delivered 2,304 units comprising 1,452 units in Damac Hills and 852 units at its international developments, including its two-tower project in Saudi Arabia (Damac Esclusiva – 454 units) as well as its first project in Jordan (The Heights – 398 units) comprising three towers in 2017 – bringing its total deliveries to 20,236 units as of 31 December 2017, marking a milestone for the company and the industry as a whole.

As of 31 December 2017, Damac Properties’ booked sales stood at Dh7.5 billion versus Dh7 billion in 2016. 

“Dubai’s property market continues to show growth as increasing demand returns to the market, and this is reflected in our booked sales. Our medium to long term outlook remains positive, with continued local demand as well and stronger interest by international investors. Our major projects in Dubai including Damac Hills, Akoya Oxygen and Aykon City continue to appeal to expats and international investors alike, while our diverse product portfolio continues to attract a wide variety of buyers for our off-plan and ready properties,” said Hussain Sajwani, Chairman of Damac Properties.

Damac expanded its villa offering at Akoya Oxygen, its second master community in Dubailand, introducing new villa types designed for buyers seeking value in an integrated golf community. It’s partnership with the Roberto Cavalli Group in 2017 led to the launch of the highly-successful ‘Just Cavalli’ villas, featuring the designer’s distinctive signature style.

Damac’s residential leasing at Damac Hills comprised of 328 units, and is 97 percent leased out as at 31 December 2017. Damac also commenced operations of its 305-key Damac Maison Royale The Distinction, in Downtown Dubai, bringing the number of hotels in operation to six.

Construction continues on over 6,500 villas, apartments at Akoya Oxygen, while its golf course, and community infrastructure is shaping up. The community’s amenities, including wellbeing facilities, retail outlets, as well as hospitality, food and beverage elements, are in various stages of planning and progress.

Highlights in 2017 include the inclusion of Damac’s stock to the Morgan Stanley Capital International (MSCI) UAE index, which measures the performance of large and mid-cap segments of the UAE market, and now consists of ten listed companies across a range of sectors including real estate, financial, industrial, telecommunications, and others.

The year 2017 also saw Damac working more closely with its agent network locally and globally, having activated 226 new brokers in 2017. Damac also conducted 524 roadshows across 107 cities in 42 countries in 2017 alone.