Manazel reports rise in 2019 profit due to higher revenue

The company is implementing an action plan to maintain liquidity and cash in the wake of coronavirus pandemic

 Al Reef villas in Abu Dhabi. Manazel said it is implementing an action plan to maintain liquidity and cash in the wake of coronavirus pandemic. Victor Besa / The National Reporter: Section: National

Abu Dhabi-based real estate developer Manazel reported a 4 per cent increase in its profit for 2019 on the back of higher revenue.

Net profit for the period ending December 31 climbed to Dh240.6 million, the company said in a statement to Abu Dhabi Securities Exchange, where its shares trade. Revenue rose 17 per cent year-on-year to Dh946.8m.

The company reported a gain in the fair value of its investment properties of Dh38.2m, a 55 per cent decline on the increase in value reported for 2018. Finance costs increased by 7 per cent to Dh76.4m, while general and administrative expenses increased 2 per cent to Dh59m.

The master developer of the Al Reef project in Abu Dhabi said it is implementing an action plan to maintain liquidity and cash by reducing operational costs as well as merging some of its services in the wake of coronavirus pandemic. It is also rescheduling “some of the financial facilities to facilitate payments and convert some assets into cash to ensure regular cash flows”.

“The world is going through exceptional circumstances due to corona and the slowdown of the local and global economy, and this forced companies to restructure their business and investment strategies to ensure continuity and stability during the next stage,” a statement from the company's chairman, Mohamed Al Qubaisi, said.

The global economy is set to contract 3 per cent this year and is projected to slide into the deepest recession since the Great Depression of the 1930s, according to the International Monetary Fund. The outbreak has hindered international trade and paralysed the airline and hospitality industries. It has also led to stresses in the real estate industry, as the pace of transactions slow and tenants face difficulties in making rent payments.

In a recent meeting with top officials from the Abu Dhabi Department of Economic Development and Abu Dhabi Council for Economic Development, Abu Dhabi based developers sought government help by ensuring funding lines from banks remain open and to grant them more loans to “alleviate their financial burden”.

Manazel also said it is working on collections from sales of its Al Reef 2 project (comprising 860 villas) in Abu Dhabi and financial dues from official authorities, which amounted to Dh170m in 2020.

The Al Reef 2 project has been completed and negotiations are under way with a strategic investor to purchase the entire Merzab project, the company said.

“Manazel will depend in the next stage on the revenues of the assets companies and subsidiaries companies, and the additional liquidity will be used to enter into new investments commensurate with the next stage to ensure the company’s ongoing profits," the statement said.

The developer currently has a property development arm as well as subsidiaries involved in commercial, retail, facilities management and district cooling, among others.

Manazel is aiming to diversify its business and is looking at new opportunities to boost growth, its chief executive told The National in an interview last year.

“We are focusing on our existing assets as well as investing in non-existing assets as part of our diversification strategy. We are looking for new opportunities in district cooling, education, retail or real estate and other sectors,” said Yaqoob Al Doseri.