Union Properties Q3 loss widens to $288m

Dubai, November 15, 2011

Union Properties'  third-quarter net loss more than doubled as the struggling developer booked additional provisions amid a sharper drop in the valuation of its properties.

The Dubai-based firm posted third-quarter loss of 1.06 billion dirhams ($288.6 million) compared with a loss of 451.8 million dirhams made reported during the same period in 2010. It booked 1.17 billion dirhams as impairment provisions on the valuation of its properties in the quarter.

EFG-Hermes estimated that the company would make a profit of 37.26 million dirhams.

Third-quarter revenues stood at 955 million dirhams, up from 545.2 million dirhams one year earlier.

Real estate firms in Dubai were hit hard by the global financial crisis in 2008 with property prices dropping by about 60 percent from its peak.

The company said it has obtained a 2.75 billion dirhams loan facility from a consortium of banks, including one of its largest shareholders, to complete ongoing projects. As a result, Union Properties expects to meet its financial commitments going forward.

Union Properties had said in June that it would repay 2 billion dirhams of debt this year and will renegotiate terms for its other loans for banks.  The company's shares are down 16 percent year-to-date. - Reuters

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