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Abu Dhabi, UAEWednesday 14 November 2018

RAK Properties swings to third quarter loss as revenue plunges

The developer booked Dh15 in provisions as revenue plummeted to Dh3.7m

Sam Siddiqi is the CEO of RAK Properties. Revenue plummeted to Dh3.7m in the third quarter from Dh58.1m a year earlier. Christopher Whiteoak / The National
Sam Siddiqi is the CEO of RAK Properties. Revenue plummeted to Dh3.7m in the third quarter from Dh58.1m a year earlier. Christopher Whiteoak / The National

RAK Properties swung to a Dh22.8 million net loss in the third quarter of this year as the company booked provisions and revenues plunged.

The Ras Al Khaimah-based developer had posted a net profit of Dh13m in the same period last year, the company said on Sunday in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.

Revenue plummeted to Dh3.7m in the third quarter from Dh58.1m a year earlier. The company did not provide a reason for the plunge in revenue. RAK Properties accounted for the Dh15m impairment provision against receivables from Polo Rak Amusements, which was closed down by the Ras Al Khaimah government, the company said.

The developer expects to tap the sukuk markets from 2019 and raise additional bank financing as it continues to deliver its 30 million square foot Mina Al Arab coastal project in Ras Al Khaimah, Samuel Sidiqi, chief executive of RAK Properties told The National earlier this month.

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RAK Properties constructing the Mina Al Arab and Hayat islands off the coast of Ras Al Khaimah, to create a cluster of beachfront mixed-use communities.

It unveiled the second phase of Marbella Villas, a residential scheme on the Dh3bn Hayat Island development, during the Cityscape Global exhibition in Dubai earlier this month. Elsewhere on Mina Al Arab, 800 apartments, 600 villas and a 1.2 kilometre-long corniche have been completed.

The company is also building two hotels – the Anantara and Intercontinental – and other housing schemes at varying stages of construction, including Flamingo Villas, Gateway Residence, Bay Residences and Julphar Residences.

RAK Properties posted an 82 per cent drop in net profit to Dh4.3m for the second quarter of 2018, with lower sales and higher expenses hitting its earnings. Revenue from sale of properties stood at Dh2.9m, down from Dh82m in the second quarter of 2017.