Eshraq Properties has revealed it is owed almost Dh500 million (US$136.1m) in overdue payments, only months after receiving approval to list on the Abu Dhabi Securities Exchange.
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One of Abu Dhabi's highest-profile property developers, Eshraq reported a loss for the third quarter of Dh919,117 on Sunday. The developer did not report any revenue from the handover of properties during the period.
But among the disclosures in the company's financial statements are Dh499.3m worth of unpaid trade receivables that are at least two months in arrears, an amount described as "shocking" by one industry expert, who asked not to be named. Such debts have swelled by 41 per cent since the end of last year.
Eshraq is likely to be forced to set aside significant amounts of cash to cover the costs of these doubtful debts, said Ankur Khetawat, a property analyst at HC Securities.
"It appears that the customers have not been paying the land dues on time and given the level of overdues [almost 98 per cent], going forward the possibility of provisioning cannot be ruled out," he said.
The stock has found little interest among institutional investors since its Dh825m listing in September, he added.
"With property companies in Dubai and Abu Dhabi, nobody is really bothered," Mr Khetawat said. "Current market conditions are not compelling enough to lure investors to the property sector, even in the blue chip stocks, as there remains a big question mark about monetisation of assets."
Eshraq's shares have fallen 35 per cent from the listing price of 40 fils to 26 fils.
The sharp decrease in Eshraq's earnings was due to its conversion from a private joint stock company to a public joint stock company, said Abdulfattah Al Barghouthi, the head of investor relations at Eshraq.
"Because of the conversion date of July 7, SCA [Securities and Commodities Authority] asked us not to include the profit from the initial public offering [IPO]," he said.
Eshraq's only income for the quarter was Dh7.5m in "sundry income", which Mr Al Barghouthi said reflected income from sales of land and transactions that had not yet been finalised.
Three projects the company listed before the IPO as key sources of future revenue were still awaiting government approval before work could begin, he said. The company will also try to purchase distressed properties to try to generate rental and sales income.
ghunter@thenational.ae
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Generational responses to the pandemic
Devesh Mamtani from Century Financial believes the cash-hoarding tendency of each generation is influenced by what stage of the employment cycle they are in. He offers the following insights:
Baby boomers (those born before 1964): Owing to market uncertainty and the need to survive amid competition, many in this generation are looking for options to hoard more cash and increase their overall savings/investments towards risk-free assets.
Generation X (born between 1965 and 1980): Gen X is currently in its prime working years. With their personal and family finances taking a hit, Generation X is looking at multiple options, including taking out short-term loan facilities with competitive interest rates instead of dipping into their savings account.
Millennials (born between 1981 and 1996): This market situation is giving them a valuable lesson about investing early. Many millennials who had previously not saved or invested are looking to start doing so now.
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Countdown to Zero: Defeating Disease, an international multimedia exhibition created by the American Museum of National History in collaboration with The Carter Center, will open in Abu Dhabi a month before Reaching the Last Mile.
Opening on October 15 and running until November 15, the free exhibition opens at The Galleria mall on Al Maryah Island, and has already been seen at the Jimmy Carter Presidential Library and Museum in Atlanta, the American Museum of Natural History in New York, and the London School of Hygiene and Tropical Medicine.
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The specs
Engine: 2-litre or 3-litre 4Motion all-wheel-drive Power: 250Nm (2-litre); 340 (3-litre) Torque: 450Nm Transmission: 8-speed automatic Starting price: From Dh212,000 On sale: Now
SPECS
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Fines for littering
In Dubai:
Dh200 for littering or spitting in the Dubai Metro
Dh500 for throwing cigarette butts or chewing gum on the floor, or littering from a vehicle.
Dh1,000 for littering on a beach, spitting in public places, throwing a cigarette butt from a vehicle
In Sharjah and other emirates
Dh500 for littering - including cigarette butts and chewing gum - in public places and beaches in Sharjah
Dh2,000 for littering in Sharjah deserts
Dh500 for littering from a vehicle in Ras Al Khaimah
Dh1,000 for littering from a car in Abu Dhabi
Dh1,000 to Dh100,000 for dumping waste in residential or public areas in Al Ain
Dh10,000 for littering at Ajman's beaches
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