Union Properties Posts Dh299m Loss

Developer Union Properties posted a net loss of Dh299 million for the first six months of this year, wider than the Dh198 million it reported for the same period last year. Revenue for the six months to June 2010 was Dh1,558 million, 16 per cent lower than the previous period's Dh1,863 million, the company said yesterday in a statement to the Dubai Financial Market. "However, as the core activities of property development and sale continued to perform well, lower operating costs reflected positively in increased gross margin of 19.5 per cent at the end of H1-2010, up from 14.6 per cent at the end of H1-2009," Union Properties announced. Operating profit of Dh151 million before provisions on valuation of properties was 43 per cent higher than the Dh106 million for the first half of 2009. The higher loss at the net level was attributed to "non-cash provision against valuation of properties, reflecting the current real estate market".

Total assets and shareholders' equity stood at Dh16.3 billion and Dh5.2 billion respectively, as of June 2010. "As handover of completed properties continue primarily at Motor City, profits continue to be recognized, resulting in progressive settlement of bank loans and contractors" dues, the company said. Total consolidated bank debt (short and long term, including subsidiaries) at the end of the first half of 2010 stood at Dh6.5 billion, implying an overall consolidated debt/assets ratio of 40:60. "While all segments of the business have continued to perform well in line with expectations, the company's focus for the second half will be on the completion and handover of its two landmark properties in the Dubai International Financial Centre", Union Properties announced.