Damac profits take a tumble in 2017 as cost of sales rises

Damac, the developer behind a Trump International golf course development in Dubai, has reported a sharp decline in profits. (REUTERS)
Updated 14 February 2018
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Damac profits take a tumble in 2017 as cost of sales rises

LONDON: Dubai developer Damac Properties recorded a 25 percent drop in profit last year amid a regional real estate slump.
The real-estate company behind the Trump International Golf Club in Dubai suffered from the rising cost of sales and a decline in margin for international projects following a tricky period for the sector.
In a statement published on the Dubai Financial Market website, the company said full-year net profit fell from 3.69 billion dirhams ($1 billion) in 2016 to 2.76 billion dirhams last year. However revenues rose by 4 percent during the same period, from7.16 billion dirhams to 7.45 billion dirhams.
The report follows a turbulent year for the Dubai property market, with a drop in demand dampening prices amid increased supply as a series of new developments came onto the market.
But the developer remains upbeat, reporting a rise in booked sales, which stood at 7.5 billion dirhams at the end of December compared to 7 billion dirhams in the previous year.
“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,” said Hussain Sajwani, chairman of Damac Properties.
He added that the emirate’s property sector was “feeling the positive effects of the emirate’s appeal and growing sophistication on the world stage. This is evident from the growing real estate sales transactions at Dubai Land Department and we are confident of the growth prospects for the sector going forward.”
So far this year, Damac has delivered 2,304 units, taking its total to 20,236 units to date. Recent completions include new units in Damac Hills, a luxury residential community in Dubai built around the Trump International Golf Club.
Construction is underway on more than 6,500 units at AKOYA Oxygen, a tree-filled community living space designed to promote living in harmony with nature. The development includes The Rainforest at AKOYA Oxygen.
The company also delivered units at new developments abroad, including its two-tower project in Saudi Arabia Damac Esclusiva and The Heights in Jordan.
Damac continued to expand its interests locally and overseas in 2017, activating 226 new brokers and conducting 524 roadshows across 42 countries.
“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,” Sajwani said.


Moody’s raises GDP growth forecasts for Saudi Arabian economy

Updated 18 October 2018
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Moody’s raises GDP growth forecasts for Saudi Arabian economy

  • The Moody’s report released on Wednesday maintained the Kingdom’s A1 rating
  • he agency expects higher oil production to boost the Saudi economy

LONDON: Moody’s has raised Saudi Arabia’s GDP growth forecast for 2018 to 2.5 percent from 1.3 percent as it maintains a “stable outlook” for the Saudi economy.
The ratings agency also increased its 2019 GDP forecast to 2.7 percent, well above the 1.5 percent previously predicted, the Kingdom’s Ministry of Finance said.
Moody’s numbers exceed the forecasts of the Saudi Arabian government for the 2019 budget announced in September.
The Moody’s report released on Wednesday maintained the Kingdom’s A1 rating.
The agency expects higher oil production to boost the economy, but also said developments in the non-oil sector will contribute to stronger GDP growth in the medium and long-term.
Moody’s said the Saudi government deficit for the 2018 and 2019 will hover between 3.5 percent and 3.6 percent, a far cry from its previous expectations of 5.8 percent and 5.2 percent.
Moody’s commended Saudi Arabia’s reasonable control of expenditure, even in the face of higher oil revenues.
“In addition to the moderate funding requirements, the government is able to access ample sources of liquidity, from both domestic or international capital markets and financial reserves. It is unlikely to face problems in financing the fiscal deficit,” the report said.
Last week, the IMF lifted its projections for economic growth in Saudi Arabia saying the Kingdom’s economy is expected to grow by 2.2 percent in 2018 and 2.4 percent next year, raising previous projections by 0.5 percent.