x Abu Dhabi, UAEMonday 24 July 2017

Sales jump 97% but profits drop for RAK Properties

Profits at RAK Properties dropped by more than 13 per cent in the first nine months of the year, even though sales almost doubled.

RAK Properties was part of the 2002 building boom but was badly hit by the economic downturn in 2008. Above, the company's headquarters at Julphar Towers. Courtesy RAK Properties
RAK Properties was part of the 2002 building boom but was badly hit by the economic downturn in 2008. Above, the company's headquarters at Julphar Towers. Courtesy RAK Properties

Profits at RAK Properties dropped by more than 13 per cent in the first nine months of the year, even though sales almost doubled.

The Ras Al Khaimah-based property developer's profits dropped in the nine months ending September 30, to Dh86.07 million (US$23.4m) from Dh98.99m in the same period a year ago.

Sales, meanwhile, jumped more than 97 per cent to Dh539m from Dh266.57m a year ago as it leased more properties. Bank balances and cash rose to Dh409.1m, compared with Dh307.4m last year.

RAK Properties was part of the 2002 building boom but was badly hit by the economic downturn in 2008.

"The leasing of residential, commercial and retail space has gained momentum during the year and there will be an upwards movement in the leasing activity in the ensuing months," Mohammad Sultan Al Qadi, the RAK Properties managing director and chief executive, said in a report released to the Abu Dhabi Securities Exchange website.

The company also said it made a repayment of Dh73m to the Investment and Development Office.

Shares in the company were little changed on the Abu Dhabi bourse, staying flat at 38 fils.

The flagship project for RAK Properties is Mina Al Arab, a US$3.27 billion beachfront resort on Ras Al Khaimah that includes several islands.

It is also the developer of Julfar Twin Towers on that site, which consists of one residential and one commercial building.

The company is also the developer of RAK Towers in Abu Dhabi.

Going forward, analysts said the future was not so clear.

"When the crash happened, Ras Al Khaimah was up and coming," said Helen Tatham, the head of residential properties at Knight Frank. "It was hit hard by the bust. Prices have stabilised but there is no sign of prices rising."

lgutcher@thenational.ae