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Deyaar Net Profit Plunges 95pc in 2009

DUBAI — Deyaar Development, Dubai’s second major developer by market value, on Tuesday recorded a 95 per cent drop in net profit in 2009.

Net profit dropped to Dh30 million from Dh 654.7 million in 2008 while full-year gross revenues reached Dh1.835 billion, up 33 per cent compared to Dh1.382 billion in 2008, the Dubai-based developer said in a statement on Tuesday.

The company, which currently manages over 16,000 commercial and residential properties, said despite extremely challenging conditions globally, it handed over eight projects in 2009 while six projects are slated for handover in 2010.

“Deyaar continues to focus on its consolidation strategy, which has led to a reduced level of defaults and a higher paid-up value for each of the company’s sold and consolidated units. As a consequence, Deyaar has been able to reduce its level of provisioning related to receivables, leading to a continuously positive operational cash flow,” the statement said.

Deyaar has adopted a revenue recognition policy in compliance with International Financial Reporting Interpretations Committee’s revenue recognition based on completed contract method, the statement said.

Gross revenues of the company for 2008 (as per the percentage of completion methodology) was Dh2.956 billion, said Deyaar. Total net profit before impairments and provisions and including pre-Initial Public offering (IPO) profits reached Dh337 million.

Of this, Dh207 million were profits attributable to the pre-IPO period and Dh100 million were for provisions and impairments.

“After the above adjustments, the company’s residual net profit for 2009 stands at Dh30 million. The net income reported for 2008 was Dh1.104 billion.

The total equity of the company stands at Dh6.75 billion as at December 31, 2009.

Markus Giebel, Chief Executive Officer of Deyaar, said the company would continue to focus on the completion of the consolidation of its projects and timely collections of its receivables in 2010. “Simultaneously, Deyaar will identify strategic expansion opportunities overseas, including potential future opportunities in regional markets such as Lebanon and Saudi Arabia,” he said.

Despite volatile conditions, Deyaar successfully handed over eight projects last year, including a Dh363 million project in Lebanon, said Giebel.

“With six projects slated for handover this year and the ongoing completion of income-generating assets, in parallel to the continued stablisation of regional and international markets, we look forward to reporting continuous stable cash flows in 2010.

He said Deyaar’s “sound fundamentals and prudent operational strategy,” including generating stable income from property management and leasing activities, placed the company in a prime position to benefit from the global recovery. “Moving ahead, we will continue to focus on providing innovative solutions that meet the evolving needs of our customers,” said Giebel.

issacjohn@khaleejtimes.com