Deyaar reports second quarter net income drop as revenue slumps

Net profit for the Dubai-listed developer declines to Dh5.9m

Deyaar Development reported a 68 per cent slide in its second-quarter profit due to lower revenue. Reem Mohammed / The National

Dubai-listed developer Deyaar reported a 68 per cent slide in its second-quarter profit as revenue slumped and finance costs rose.

Net profit for the three months to June-end declined to Dh5.9 million, the company said in a statement to the Dubai Financial Market, where its shares trade. Revenue dropped 53 per cent to Dh76m during the period, while finance costs jumped 64 per cent to Dh9.2m.

Provisions and expenses against claims also rose to Dh262,000 in the second-quarter compared with Dh29,000 a year ago.

During the reporting period, Deyaar's chief executive Saeed Al Qatami said, the company was "keen to ensure the continuity of its business in various sectors, while taking all precautionary measures and complying with the decisions issued by [the[ government ”.

“The company continued the construction work on its existing projects, in addition to providing all property and facilities management services to our clients, as well as handover of units to the new owners in Midtown project.”

Deyaar's first-half net profit fell 77 per cent to Dh8.5m as revenue declined 48 per cent to Dh174.5m. Provisions during the period rose to Dh1.2m from 721,000 reported at the end of June in 2019.

Established in 2002, Deyaar – in which Dubai Islamic Bank holds a majority stake – has developed a number of projects in Dubai including in Business Bay, Dubai Marina, Al Barsha and Jumeirah Lake Tower, among others.

“We will continue to work on our projects according to schedule under the current situation,” Mr Al Qatami said. “The completion rate of Bella Rose project in Al Barsha South has exceeded 75 per cent, and construction for the third phase of Midtown residential project will start soon, which will add seven new buildings to the development.”

In April this year, shareholders of Deyaar approved the company's plan to restructure its capital to boost its finances. It also secured approval from the  Securities and Commodities Authority to reduce its capital from Dh5.78 billion to Dh4.55b.