Union Properties narrows loss on cost-cutting steps

Dubai - Group has restructured largest part of outstanding debt with various financial institutions, which will help improve overall cash flow

Union Properties posted a net loss of Dh38.56 million in the second quarter compared to Dh121.86 million in the previous quarter, owing to massive cost-cutting measures taken by the property developer.
Its administrative and operational expenses shrank to Dh58 million for the first six months of 2020 as compared to Dh76 million for the same period last year thereby resulting in a drop by nearly 24 per cent.
The group has restructured the largest part of its outstanding debt with various financial institutions, which will help improve its overall cash-flow profile and liberate funds for growth, the DFM-listed company said on Saturday.
Last week, it reached an agreement with Emirates NBD for the full restructuring of its outstanding Dh946 million debt with the bank as part of its three-year turnaround plan
"In the past, our group has suffered a high level of losses, mostly due to a significant drop in the real estate sector and the mandatory subsequent 'marked-to-market' revaluation, which has resulted in a total net loss of Dh160.42 million for the first half of 2020," said Khalifa Hasan Al Hammadi, the newly-appointed chairman of Union Properties, who started his functions during the second quarter.
"Our debt profile was also a serious challenge that needed to be addressed and this is what we have done as our number one priority. The group's new leadership has now a clear roadmap and we are committed to remain on the right track," he said in a statement on Saturday.
"We are also actively working with select partners towards the improvement and development of our extensive land bank to create value assets with recurring cash-flows in addition to identification of new business alternatives to suit the market demand and situation," said Al Hammadi.
"Compared to other property developers that are massively impacted by the current crisis, we are confident that our group will ultimately thrive, notably thanks to the diversification of its operating subsidiaries through different sectors of the economy. Those diversified operating subsidiaries bring to the Group more confidence, resilience, and sustainability during these challenging times," he concluded.
- waheedabbas@khaleejtimes.com