Profits at Damac fell by more than a third in the second quarter of 2016 as the Dubai developer blamed a slow Ramadan for a fall in property sales.
The glitzy developer, known for offering buyers fancy cars and boats as inducements to purchase flats in luxury towers in Dubai and across the Middle East, reported this morning that profits for the three months to the end of June 2016 fell to Dh886 million, down 37 per cent compared with the Dh1.4 billion it made during the same period a year earlier.
Revenues for the third quarter fell by a quarter to Dh1.7bn from Dh2.3bn during the same period a year earlier as the company delivered 494 completed homes in the first half of the year in Dubai and Beirut.
Damac said that it booked property sales worth Dh3.63bn during the period – “marginally below the previous three quarters run rate, due primarily to the full impact of Ramadan in this quarter”.
Profits for the first six months of 2016 were down 36 per cent to Dh1.9bn from the Dh2.6bn the company made during the same period a year earlier while revenue for the half year was down 42 per cent to Dh3.3bn from Dh4.7bn.
House prices in Dubai have been falling for the past two years as the emirate’s economy has been hit by the falling price of oil and a strong dirham making it more expensive for some overseas buyers to purchase Dubai property.
Last month property broker JLL revised its forecast for a recovery in the Dubai market back by six months to the start of 2017 due to an anticipated negative impact on the market by Britain’s decision to leave the European Union.
Nonetheless, Damac said that it expected to achieve full year sales of more than Dh7bn as it plans to deliver between 2,700 and 3,000 new homes.
“With the first half of 2016 behind us, we are more optimistic today about the business and expect to end 2016 in a more positive position,” said Damac chairman, Hussain Sajwani.
Damac shares were down 0.42 per cent in trading by 11am this morning at Dh2.38.
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