Union Properties Loss Widens due to Provisions

DUBAI - Union Properties posted its third consecutive quarterly loss on Monday, after provisions for contracting and property valuation, landing the Dubai-listed developer with an annual loss of about half a billion dirhams and sending its shares lower.

By (Staff Report)

Published: Wed 17 Feb 2010, 12:19 AM

Last updated: Mon 6 Apr 2015, 10:19 AM

In a statement on the Dubai Financial Market website, the emirate’s third-largest developer by market value reported a full-year net loss of Dh498 million compared with a net profit of Dh763.1 million in 2008.

It said that before provisions it made a profit of Dh373 million  for the year 2009.

The company did not provide a breakdown of its results, but calculations from previous statements showed the company made a loss of Dh148 million for the fourth quarter compared with a loss of Dh37.6 million in the same period of 2008.

The statement said that revenues for the year were Dh4.4 billion, total assets Dh17.5 billion and total shareholders’ equity was Dh5.5 billion.

Union Properties’ shares ended two per cent lower at Dh0.49, underperforming Dubai’s bourse, which ended down 0.2 per cent.

“The results are not without expectations. They fully flagged there would be additional contracting provisions,” said Chet Riley, equity analyst at Nomura International in Dubai.

The firm’s chairman Khalid bin Kalban said in November it may take a valuation loss on its property portfolio and provisions in the fourth quarter.

Earlier in February, it said several investors are interested in its luxury Ritz Carlton hotel, which it could sell if offered around $400 million.

Kalban had said that out of the firm’s Dh6.5 billion debt, a sum of Dh2.8 billion had been rescheduled for payment to 2011 from 2009, adding the remainder was longer-maturing debt.

In January Credit Suisse had slashed its price target for stock in Union Properties to Dh0.03 from Dh0.80 and said even if the developer overcame its liquidity squeeze, there would not be much equity left after meeting its debt obligations.

In recently reported results, rival developer Emaar Properties, builder of the world’s tallest tower, returned to profit in the fourth quarter, while Aldar Properties, Abu Dhabi’s largest developer by market value, reported its first-ever quarterly loss. 

business@khaleejtimes.com