Union Properties Q2 loss widens on provisions
Dubai, August 11, 2011
Union Properties went further into the red in the second-quarter as the struggling Dubai developer booked non-cash provisions against valuation of its properties.
The third largest developer in Dubai made a net loss of Dh521 million ($141.8 million) in the quarter, according to Reuters calculations. This compared with a loss of Dh349.38 million in the same period a year ago.
Union Properties did not provide a second quarter earnings figure but said in a statement that its net loss for the first six months of the year widened to Dh439 million from Dh299 million in the year earlier period.
It did not give more details about the non-cash provisions.
One analyst polled by Reuters estimated second-quarter losses of Dh412.7 million.
Total consolidated bank debt at the end of June fell to Dh6.2 billion from Dh6.9 billion at the end of the first half last year, the developer said. It continued to hand over properties from its Index Tower and Limestone House projects.
In June, the company said it would repay Dh2 billion of debt this year and will seek to renegotiate terms for its other loans with banks.
Union's revenues for the first half of the year jumped 44 per cent to Dh2.25 billion, it said in the statement.
The company finalised the sale of its Ritz Carlton hotel in Dubai for Dh1.1 billion in November last year and used some of the proceeds to reduce the debt.
Dubai's property sector was hit hard by a downturn, with billions of dollars worth of projects put on hold or cancelled, while prices slumped as much as 60 per cent.
House prices in Dubai are set to fall another 10 per cent a Reuters poll in July showed.
Shares of Union Properties closed 3.5 per cent higher earlier on Thursday on the Dubai bourse before its earnings were announced. – Reuters