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Damac quarterly profit down 87% as Dubai property prices tumble

Damac quarterly profit down 87% as Dubai property prices tumble

Dubai property prices have steadily fallen since a mid-2014 peak

Dubai’s Damac Properties, owner and operator of the only Trump-branded golf club in the Middle East, reported a nearly 60 per cent fall in full year profit on Thursday, while its profit in the fourth quarter tumbled 87 per cent.

Damac posted a full year net profit of Dhs1.15bn ($313m) for 2018. According to Reuters calculations, the firm’s fourth quarter net profit was about Dhs58m.

EFG Hermes had forecast the firm would make a fourth-quarter net profit of Dhs214m.

Dubai property prices have steadily fallen since a mid-2014 peak, hurting earnings of developers and forcing construction and engineering firms to cut jobs and halt expansion plans.

Damac’s chairman, Hussein Sajwani, told CNBC at the World Economic Forum in Davos last month that Damac’s profit fell last year and would “continue to be (at) similar levels, this year and next year.”

“I think we are at the bottom, from a price point of view, but it will take at least two years to absorb the supply,” Sajwani said, according to a transcript of the CNBC interview.

Savills has said Dubai’s residential real estate prices could fall by 5 to 10 per cent this year due to new supply, a strong dollar and lower oil prices.

Damac reported a total revenue of Dhs6.1bn for 2018, with booked sales amounting to Dhs4.3bn. In 2017 booked sales totalled Dhs7.5bn.

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