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Dubai Real Estate Feels Impact of Slump
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Deyaar Development , one of Dubai's largest publicly traded real-estate companies, Sunday posted a 69% decline in second-quarter net profit as the downturn in the emirate's property market hit sales and project delivery.Deyaar's net profit for the period fell to 75.4 million U.A.E. dirhams ($20.5 million), the company said in a statement on the Dubai Financial Market. Net profit in the second quarter of 2008 had totaled 246.9 million dirhams, more than double than in the second quarter of 2007.
"I am very pleased to note that our financial results for the second quarter have been in line with our expectations and are reflective of our sound fundamentals," Deyaar Chief Executive Markus Giebel said in the statement.
"Deyaar's strong balance sheet performance in the first half of 2009 is a validation of our business strategy that has positioned us better to navigate through a challenging market," he said in a report, carried by Zawya Dow Jones.
Gross revenue for the period was 402 million dirhams. Total shareholders' equity was 7.4 billion dirhams, while total assets reached 11.3 billion dirhams.
The company is a victim of the global financial crisis that is taking its toll on Dubai's once-booming property sector, where prices have been sinking since the fourth quarter of 2008. By some estimates, real-estate prices are down about 40% since then.
Deyaar said it delivered five projects during the second quarter and is on track to deliver seven projects this year.
Deyaar shares closed down 1.4% at 0.70 dirham on the Dubai Financial Market Sunday.
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