DAMAC expects meeting sales targets in 2017

DAMAC expects meeting sales targets in 2017
We are optimistic because of the increasing demand and the stability in the real estate market, Taqi told Mubasher.
Damac DAMAC -0.88% 3.38 -0.03

By: Amr Adel

Dubai – Mubasher: DAMAC CFO Adil Taqi on Wednesday said that his company is expecting sales volume to exceed the AED 7-billion target by the end of 2017.

We are optimistic because of the increasing demand and the stability in the real estate market, Taqi told Mubasher.

Usually, the fourth quarter of the year witnesses a bigger demand for real estates comparing to other quarters, because of the increasing touristic activities and better weather, Taqi added.

The total value of sales-in-reservoir, which developer sells before completion, ranged between AED 1.8 billion and AED 2 billion in the Q2-17 and Q3-17, respectively.

The company’s profits fell by 19% to AED 2.3 billion during the first nine months of 2017, which is less than expectations by around AED 780 million.

The main reason behind this drop is the decline in profit margin, due to the completion of two projects outside Dubai, which have less profitability, amidst harsher economic conditions in the real estate sector as compared to the situation two years ago, Taqi commented.

According to the financial results, the profit margin fell to 49.3% during the first nine months of 2017, as compared to 57.3% in the year-ago period.

The increase in the general, administrative, and sales expenses by 21% was due to the increase in costs and expenses of the rented units, as the company currently owns 350,000 square feet of rentable real estates, with annual revenues worth AED 30 million, CFO said.

DAMAC is implementing a debt reduction plan from AED 5.1 billion ($1.4 billion) to AED 4.7 billion ($1.3 billion) by the end of the year, he added

The total value of the company’s cash and bank deposits reached AED 7.9 billion, while stock profitability reached AED 0.38, while total debts amounted to AED 5 billion, as of 30 September 2017.

The units delivered in the first nine months of 2017 reached 1923 units, divided into 1071 units in “DAMAC Hills” in Dubai, 454 units in “DAMAC Esclusiva” in Saudi Arabia, 398 units in “The Heights” in Amman, Jordan.

Translated by: Mohammad Shokhba

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Source: Mubasher Exclusive

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