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Dubai – News agencies: Two of the largest real estate development companies in the UAE announced a drop in profits, one of them and recording losses for the second during the past year, while a third announced a slight increase in profits that exceeded analysts’ expectations.
Yesterday, Emaar announced that its profits declined by 58 percent during 2020 compared to the previous year, amid the unprecedented repercussions of Corona on the real estate market in the Emirate of Dubai.
The company, listed on the Dubai Financial Market, said in a statement that net profit amounted to 2.61 billion dirhams ($ 710 million) last year, down from 6.2 billion dirhams ($ 1.69 billion) in 2019.
Revenues decreased by 20 percent during the period to 19.71 billion dirhams (5.36 billion dollars), compared to 24.58 billion dirhams (6.69 billion dollars) in the previous year.
The statement attributed the decline in profits to a 355 percent increase in Emaar’s share of the results of its affiliates, to 582 million dirhams (158.46 million dollars) compared to 128 million dirhams (34.85 million dollars) the previous year.
The results of the largest construction company in the UAE reflect the extent to which Dubai’s economy has been affected by the Corona pandemic, and its apparent impact on key sectors such as real estate, tourism and investment.
Emaar is one of the largest real estate development companies in the Middle East. It was established in 1997, and it operates in 36 markets in the Middle East and North Africa, Asia, Europe and North America.
On the other hand, the “Damac” Real Estate Company said yesterday that it had incurred losses in 2020 that exceeded one billion dirhams.
In a statement, the Dubai Financial Market announced its preliminary financial results for 2020, with total revenues of 4.7 billion dirhams, compared to 4.4 billion dirhams in 2019.
The value of booked sales reached 2.3 billion dirhams, after reaching 3.1 billion dirhams in 2019.
The company recorded net losses of one billion and 39 million dirhams ($ 283 million) compared to 37 million dirhams in 2019, while the value of total assets stabilized at 21 billion dirhams, after it had reached 23.8 billion dirhams at the end of 2019.
The company indicated that it is logical that the global lockdown and travel restrictions, combined with the decline in global travel, have negatively affected the real estate market in Dubai.
Until the end of last year, total debts reached 3.2 billion dirhams, while the value of cash and bank balances reached 4.2 billion dirhams.
Hussein Sajwani, Chairman of DAMAC, commented on the results by saying that “the year 2020 was very difficult for all real estate developers in the UAE, including DAMAC.” He predicted that the real recovery would take 12 to 24 months.
On the other hand, Aldar Properties, the largest real estate developer in Abu Dhabi, announced yesterday a net profit of 1.932 billion dirhams ($ 526 million), up slightly from the previous year, beating analysts’ expectations for strong development sales.
Analysts had estimated a net profit of 1.705 billion dirhams, according to Refinitiv data. The company achieved a net profit of 1.925 billion dirhams in 2019.
Its performance is strengthened “as a result of the benchmark performance for managing development projects in 2020”.
Its net profit for the fourth quarter of last year was 729 million dirhams, an increase of 28 percent over the previous year.
Shares of Aldar rose 12.3 percent this year to close at 5666.09 dirhams yesterday.
Its board of directors recommended distributing 0.145 dirhams in cash dividends for 2020, unchanged from the previous year.
She said 85 percent of its workforce chose to get vaccinated against Covid-19 in less than a month.
(One dollar equals 3.6729 Emirati dirhams).