Union Properties posts Q2 profit
Dubai, July 30, 2012
Indebted developer Union Properties posted a quarterly profit on Monday, sending its shares higher, as it cut debt and said it would focus on building mid-size development projects.
The company had second-quarter net profit of Dh83.6 million ($22.76 million), according to Reuters calculation based on financial statements. That compares to a loss of Dh520.79 million a year-ago.
The developer, which reached a 3.8-billion dirham debt deal with major shareholder Emirates NBD earlier this year, did not provide quarterly figures. One analyst at EFG Hermes forecast profit of 4.91 million dirhams, in a Reuters poll.
Net profit for the first half of 2012 was 106 million dirhams, compared to a loss of 439 million dirhams in the prior-year period, Union Properties said in a statement.
The developer's shares rose 3.16 percent on the Dubai index . The stock is up 47.3 percent on the year.
Union Properties' six month revenue stood at 1 billion dirhams, down from 2.2 billion dirhams a year-ago when it booked gains on the sale of Index Tower and Limestone House in Dubai's financial district.
The company, which has not undertaken new development work in recent years, said it would focus on mid-size projects which have quicker turnaround times and "reasonable profitability."
The developer said it cut its total consolidated bank debt by nearly 40 percent to 3.8 billion dirhams in the first half of the year and planned to reduce it further.
In January, Union Properties said it would transfer assets worth 1.1 billion dirhams to Emirates NBD as part of the debt deal and its remaining liabilities to the bank would be extended until 2017.
Property firms were hit by Dubai's property market collapse, with homes prices plunging by more than half and large number of projects being put on hold. Recovery has been gradual as oversupply weighs on the emirate's market. - Reuters