Luxury property lifts Damac first-quarter profit

Damac Properties reported a 3 per cent rise in profit from its property interests for the first quarter of the year, even as headline profits fell by more than a third.

The Dubai-based developer announced yesterday that profit at Damac Real Estate Development, the company’s principal operator, hit US$215.8 million during the first quarter of 2015, compared with $209.6m for the same period last year.

Revenues for the quarter rose more than 11 per cent to $485.99m, compared with $435.8m in the same period last year.

Profits at Damac’s holding company, Damac Properties Dubai, fell 38 per cent year-on-year, after a one-off gain realised on the recognition of investment in an associate in the first quarter of 2014 was not repeated.

However, a spokesman for the company said that the comparison was not a valid one, as Dubai Real Estate Development had been incorporated into Damac Properties only last June.

Damac said that it had booked sales of Dh2.8 billion during the quarter, which had featured the handover of 999 units in its Lakeside development.

“We have seen demand for luxury property remain solid, underlining the Dubai’s position as the region’s primary business and tourist destination,” said Hussain Sajwani, Damac’s chairman.

“The Dubai market continues to mature and we are confident that this will bring long-term stability to the sector.”

Damac said yesterday that it had approved a dividend payout of 25 per cent for 2015, consisting of a 10 per cent interim dividend and a final payment of 15 per cent, and said that it also expected to pay out a dividend of at least 25 per cent in 2016.

Such dividend guidance was welcomed by analysts, as was the rise in sales.

“The Q1 numbers came in largely ahead of expectations by a decent margin, given that consensus estimates had embedded a scenario of weaker demand,” said Mohammad Kamal, the research director at the Dubai-based investment bank Arqaam Capital.

“New sales volumes are up 4 per cent quarter-on-quarter, indicating that sales momentum at Akoya, supported by incentivised pricing, has not slowed in the past three months,” he noted.

“The market will continue to monitor sales volumes throughout 2015, and pay attention to provisions against receivables to assess buyer default risk.”

Damac shares, which first listed on the DFM in January of this year, closed up 0.32 per cent yesterday at Dh3.11.

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John Everington

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