RAK Properties reported a 55 per cent decline in profits, despite handing over homes in three developments
Profit for RAK Properties falls 55%
RAK Properties' profit declined by 55 per cent in the third quarter compared with the same period last year, despite the handover of units in three developments.
The Ras Al Khaimah developer's revenue increased to Dh201 million (US$54.7m) from Dh68m in the third quarter last year, as it completed the sale of apartments and villas in Julphar Towers and the Mina Al Arab projects in RAK, as well as the RAK Tower on Reem Island in Abu Dhabi.
But profit fell to Dh30.3m compared with Dh67.5m, as the cost of sales increased to Dh142m, up from Dh43m last year. The company did not explain the increase in a statement posted on the Abu Dhabi Securities Exchange.
Profit for the first nine months of this year fell nearly 40 per cent to Dh99m from Dh164m in the same period last year. But revenue increased Dh152m to Dh267m in the nine-month period, thanks to the increased handover of units.
RAK Properties is focusing on handing over 20 buildings with 808 apartments in the Mina Al Arab project, according to its statement.
The company had a bank balance of Dh335m at the end of the quarter, down from Dh437m at the end of last year.
RAK Properties also revealed it was in negotiations with financial institutions and investors to fund a hotel project but declined to offer further details.
Its share price was unchanged yesterday at 33 fils, down from a high of 41 fils on April 27.
RAK Properties was established in 2006 to "implement the emirate's plans to promote real estate, tourism and leisure facilities in RAK and invest in interesting projects".
Its primary developments are the Dh10 billion Mina Al Arab, which covers 399 hectares, and the Dh500m Julphar Towers, which consists of twin 45-storey buildings.
The company started handing over apartments in RAK Tower in July, the first building in the Marina Square development for which handovers have begun.