Company reorganisation and staff costs ate into first half profits at Abu Dhabi-based property developer Manazel Real Estate.
For the six months of 2016, profits at the developer which built Abu Dhabi’s mid market Al Reef compound fell 30.5 per cent to Dh31.2 million, down from Dh44.9m a year earlier.
In a statement accompanying its results, Manazel said that the fall in profits was the result of an “investment in human capital and organisational restructuring efforts”.
Revenues for the period stood at Dh267.4m, a 1.7 per cent increase on the Dh262.8m the company made the previous year.
Manazel said that the increase in revenues was down to construction progress at its Al Reef 2 project in the Al Samha area of Abu Dhabi, which meant that it was able to make more money from off plan purchasers.
Manazel started selling 860 off plan villas at Al Reef 2 in 2014. The project is scheduled to be delivered from the end of 2017.
The company announced that it has sold 90 per cent of the off plan villas in the development.
“We have commenced a cost management, profit optimisation and human capital investment programme which coincides with new project launches, which we are targeting for H2 2016,” said Manazel chief executive Yaqoob Al Doseri. “We expect both these initiatives to have a positive impact on our results in the years ahead”
The company said that it was looking to expand its business into “non cyclical revenues”, which would be less affected by the volatile Abu Dhabi property market and help diversify earnings.
In January, the company announced that it had set up a subsidiary to operate and manage its 60,000 square meter Capital Mall in Mohammed bin Zayed City and retail areas in its Al Reef and Al Reef 2 complexes.
“We will continue to pursue and study significant growth opportunities that exist across both our local and regional markets, and remain focused on steady expansion and growing Manazel’s brand and footprint in the years ahead,” Mr Al Dorsi added.
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