Ras al Khaimah Properties posts 34% profit drop

According to the company's interim result posted on the Abu Dhabi bourse website, profit for the period fell to Dh73.3 million, from Dh110.7 million a year earlier.

RAK Properties, the largest developer in Ras al Khaimah, and which is listed on the Abu Dhabi stock exchange, has seen its net profit fall by nearly 34 per cent during the second-quarter compared to the same period last year, as investors delay their payments. According to the company's interim result posted on the Abu Dhabi bourse website, profit for the period fell to Dh73.3 million ($19.9 million), from Dh110.7 million a year earlier.

First-half net profit fell 36 per cent to Dh143 million, the company said, while net assets at the end of June were Dh3.12 billion, including Dh485 million in cash. "The year 2009 has been challenging and testing time particularly for the real estate industry. The liquidity crisis led to various financial disturbances and created low level of consumer confidence," the developer said in the statement.

RAK Properties does expect income to improve after handover of three projects in the fourth quarter this year, including the two Julfar Towers, RAK Towers on Reem Island, Abu Dhabi, and 93 villas on Mina Al Arab Precinct 4. With the delivery of these properties, investors must settle the purchase price in full. "The collection of instalments is still an issue until the mortgage market ease out," the company statement said. "The Company has approached its relationship banks and other financials institution for financing the future projects as well as to extend the mortgage facilities to the customers."