Dubai-based developer Union Properties swung to a full-year profit in 2020, driven by its turnaround strategy and a fall in operating costs.
The company's net profit for the period ending 31 December reached Dh201 million, up from a loss of Dh224.3m reported at the end of 2019, the company said in a statement to the Dubai Financial Market, where its shares trade.
However, revenue for the year dropped 11 per cent to Dh375.86m. Assets at the end of last year climbed to Dh5.99 billion from Dh5.86bn reported in 2019. Shareholder equity grew 6.6 per cent year-on-year to Dh2.89bn.
“Despite extremely challenging market conditions, this impressive turnaround has been achieved thanks to the group’s asset quality … [and a] massive reduction in operating costs compared to previous years,” the company said.
The turnaround strategy being implemented by the company's board has allowed it to reduce accumulated losses and increase shareholder equity, Union Properties said, without giving details of the reduction in accumulated losses or operating costs.
Union Properties, like its peers in Dubai, has faced headwinds amid a slowdown in the emirate’s real estate market in the wake of a drop in oil prices that began in 2014. Ongoing concerns about an oversupply of properties and the Covid-19 pandemic posed further challenges in 2020, affecting real estate sales. Property prices in Dubai slipped 8 per cent year-on-year in Dubai during the fourth quarter, according to a recent report from JLL.
Union Properties, whose projects include Motor City and Uptown Mirdif, reached an agreement with Emirates NBD in August to restructure an outstanding debt of Dh946m. The company has also agreed to sell a 40 per cent stake in its Dubai Autodrome subsidiary for Dh400m, it said in a statement in September.
Union Properties, whose turnaround strategy also involves diversifying operations and developing recurring revenue lines, is planning to list three of its subsidiary companies.
Facilities management firm ServeU, interiors contractor The FitOut and Dubai Autodrome will all be listed on the DFM, it said in August, without giving a timeline for the potential listings.
