DAMAC Properties net profit grew 30% to AED 4.51 billion (US$1.23 billion) for full year 2015

DAMAC Properties Dubai Co PJSC (DFM: DAMAC) (“DAMAC” or the "Company"), a leading developer of high-end property in the Middle East, announces results for year ended 31 December 2015. 

Financial Highlights

During full year 2015, DAMAC recorded revenue of AED 8.54 billion ($2.32 billion), gross profit of AED5.07 billion ($1.38 billion). 

DAMAC recorded net profit for the year at AED 4.51 billion (c. $1.23 billion), an increase of 30% compared to 2014.

During 2015, total assets grew 25% to AED 23.45 billion ($6.38 billion), Total equity grew 87% to AED9.83 billion ($2.68 billion). Gross debt stood at AED3.76 billion ($1.02 billion) as at 31 December 2015. Cash and bank balances stood at AED 9.50 billion ($2.59 billion). 

DAMAC continues to maintain a healthy net cash position of AED 5.74 billion ($1.56 billion) and gross debt to equity ratio stands at 0.38 as at 31 December 2015.

Operational Highlights

Booked Sales for the year stood at AED 9.06 billion ($2.47 billion). Area sold during the year was 8.12 mn sq ft, 3% higher than 2014. 

DAMAC has completed over 2,600 units in 2015, including units in AKOYA by DAMAC, the first master plan development around a Golf course in Dubai, thus demonstrating capabilities as a master developer. 

Other completions in AKOYA by DAMAC include 3 buildings in the G+7 structures totaling 479 units (Golf Panorama, Golf Horizon, and Golf Vista). 

DAMAC also completed the first project in Qatar during the year with 512 units in Doha. Other developments completed during the year included, Lakeside, Tenora and DAMAC Maison Upper Crest. The overseas completions are noteworthy as they demonstrate the transferability of skills and operational know how into new markets. 

The Company also continued to bring to market new and innovative products including Vista Lux the central hub of the AKOYA Oxygen development, The Promenade a residential and serviced apartments offering in AKOYA by DAMAC in addition to a number of new expansions in both AKOYA and AKOYA OXYGEN. 

On the Towers front, Merano in Business Bay and Paramount Hotel and Residences on Sheikh Zayed Road were introduced. 

The company also added a new partner to the expanding stable of luxury brand associations with the launch of Bugatti Villas in AKOYA OXYGEN, the Company’s first automotive brand partnership. 

Hussain Sajwani, Chairman of DAMAC, commented:

“The Dubai real estate market is at a consolidation point in the cycle and the rapid growth witnessed in 2012-2014 is now behind us. However, this market creates opportunities for well capitalized and experienced companies like ourselves with a strong track record.

Regarding market sentiment, the oil price dynamic is certainly a factor, but one should always remember that a falling oil price creates as well as erodes wealth. 

Devaluing currencies clearly drive asset prices up in hard dollars while at the same time driving investors to want to lock in parts of their wealth in the hard currency in fear of further devaluation. 

Perhaps most importantly 2015 ended with supply not exceeding 8,000 units for the Dubai market, a massive reduction on the initial 25,000 units supply speculation. 

We strongly believe that the current environment is very different than the one we faced in 2008. Dubai, in terms of government, regulator, developers, providers of capital, both debt and equity and investors have learned a great deal. The underlying fundamental drivers that make Dubai an attractive destination have not changed. 

Importantly for the real estate market, a high single digit rental yield, amongst the healthiest in any major metropolitan centers globally, should continue to support investment demand. Ultimately, developers who have the capabilities to target healthy pockets of demand, and who can offer a portfolio of products to satisfy said demand would fare better. 

Looking ahead, we expect the market in Dubai in 2016 to demonstrate its resilience against the background of the challenging economic environment. We see the structural shortage of supply as the cornerstone of the market resilience. We expect the total supply in Dubai to again fall short of 10,000 new units in 2016 eventually driving the market back into positive pricing growth territory, perhaps towards the 2nd half of the year or early 2017. 

At DAMAC we remain focused on leveraging our competitive edge and believe we have at our disposal a set of levers that will allow us to continue to post solid results in the year to come”. 

Exchange rate 1 USD=3.675 AED