Union Properties, Dubai's third-largest property developer, reported a loss of Dh227.9 million (US$62m) in the second quarter as the company saw its investment properties lose value.
The company wrote down Dh304m in the value of its rental buildings in the first half of the year, blaming "the current conditions of the property market".
Most of the Dh1.29 billion in revenue came from the recognition of profit made on previous sales of homes that were delivered in the second quarter. Property developers generally recognise profit for properties as they are finished.
Analysts said Union Properties was troubled by the sharp downturn in the property sector, but it seemed to be dealing with the issues. In the second quarter alone, the company restructured short-term debt worth about Dh956m so that it could now be paid over six years.
"All in all, they are possibly over the hump," said Chet Riley, an analyst at Nomura Securities in Dubai. "They are still over-leveraged and there is a high degree of risk off the balance sheet. But it appears that they are managing the situation."
Analysts said cash reserves were becoming an increasingly critical issue for Union Properties. It had just Dh79m as of the second quarter, down from Dh251m in the first quarter. Sana Kapadia, an analyst at EFG-Hermes, said in a research note that the company's "liquidity position is far from healthy".
Another concern for the company was the delivery of units, which slowed in the second quarter, Ms Kapadia wrote. "The impact of slower deliveries, with a greater proportion now expected to spill over into 2010, look likely to reduce our revenue and earnings forecasts for 2009 sharply," she said.
"While the company believes it will be able to rent some of its unsold inventory, given the underlying weak Dubai market, we believe high occupancy levels and hence positive cash flows on any new rental properties will also take longer to take shape."
An inability to get financing has hampered Union Properties over the past few months.
In February, Union Properties put the construction of its Dh1.69bn Formula One theme park, originally due to open this year, on hold because of a shortage of finance.
The company is also going through a management shake-up. In June, Simon Azzam stepped down as chief executive after serving as a senior executive for 23 years. The company chose Khalid al Jarwan, a former executive of Dubai Investments Group and Abu Dhabi National Oil Company, as general manager. Mr al Jarwan has yet to make any official statements on behalf of the company.
The company's shares rose 3.6 per cent, or Dh0.04, in trading Thursday, closing at Dh1.15.
@Email:bhope@thenational.ae
Company%20Profile
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The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
Electoral College Victory
Trump has so far secured 295 Electoral College votes, according to the Associated Press, exceeding the 270 needed to win. Only Nevada and Arizona remain to be called, and both swing states are leaning Republican. Trump swept all five remaining swing states, North Carolina, Georgia, Pennsylvania, Michigan and Wisconsin, sealing his path to victory and giving him a strong mandate.
Popular Vote Tally
The count is ongoing, but Trump currently leads with nearly 51 per cent of the popular vote to Harris’s 47.6 per cent. Trump has over 72.2 million votes, while Harris trails with approximately 67.4 million.
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
Try out the test yourself
Q1 Suppose you had $100 in a savings account and the interest rate was 2 per cent per year. After five years, how much do you think you would have in the account if you left the money to grow?
a) More than $102
b) Exactly $102
c) Less than $102
d) Do not know
e) Refuse to answer
Q2 Imagine that the interest rate on your savings account was 1 per cent per year and inflation was 2 per cent per year. After one year, how much would you be able to buy with the money in this account?
a) More than today
b) Exactly the same as today
c) Less than today
d) Do not know
e) Refuse to answer
Q4 Do you think that the following statement is true or false? “Buying a single company stock usually provides a safer return than a stock mutual fund.”
a) True
b) False
d) Do not know
e) Refuse to answer
The “Big Three” financial literacy questions were created by Professors Annamaria Lusardi of the George Washington School of Business and Olivia Mitchell, of the Wharton School of the University of Pennsylvania.
Answers: Q1 More than $102 (compound interest). Q2 Less than today (inflation). Q3 False (diversification).
The specs
Engine: Long-range single or dual motor with 200kW or 400kW battery
Transmission: Single-speed automatic
Max touring range: 620km / 590km
Price: From Dh250,000 (estimated)
Types of fraud
Phishing: Fraudsters send an unsolicited email that appears to be from a financial institution or online retailer. The hoax email requests that you provide sensitive information, often by clicking on to a link leading to a fake website.
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SIM swap: Fraudsters duplicate the SIM of your mobile number without your knowledge or authorisation, allowing them to conduct financial transactions with your bank.
Identity theft: Someone illegally obtains your confidential information, through various ways, such as theft of your wallet, bank and utility bill statements, computer intrusion and social networks.
Prize scams: Fraudsters claiming to be authorised representatives from well-known organisations (such as Etisalat, du, Dubai Shopping Festival, Expo2020, Lulu Hypermarket etc) contact victims to tell them they have won a cash prize and request them to share confidential banking details to transfer the prize money.
* Nada El Sawy
SPECS
Engine: 4-litre V8 twin-turbo
Power: 630hp
Torque: 850Nm
Transmission: 8-speed Tiptronic automatic
Price: From Dh599,000
On sale: Now
COMPANY%20PROFILE%20
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New Zealand T20 squad
New Zealand T20 squad: Tim Southee (captain), Finn Allen, Todd Astle, Hamish Bennett, Mark Chapman, Devon Conway (wicketkeeper), Lockie Ferguson, Martin Guptill, Adam Milne, Daryl Mitchell, Glenn Phillips, Ish Sodhi, Will Young
The Great Derangement: Climate Change and the Unthinkable
Amitav Ghosh, University of Chicago Press
COMPANY%20PROFILE
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From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
COMPANY%20PROFILE
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