Shares in Dubai-based real estate developer Damac Properties fell on Thursday following publication of its audited financial statements.

The company reported a full-year net profit of 1.15 billion United Arab Emirates dirhams ($313.10 million), compared to 2.76 billion dirhams in 2017, translating into a 58.3 percent drop.

The company’s fourth quarter (Q4) of 2018 net profit dropped by 87 percent to 59.1 million dirhams, from 455.2 million dirhams in Q4 2017.

“We see no catalysts for Damac in the foreseeable future as the company remains very tight on cash to repay outstanding sukuk in 2019/22/23,” Mohamad Haidar, associate director at Arqaam Research told Zawya by email.

In April 2018, Damac has issued a $400 million, five-year sukuk with a 6.625 percent initial yield. The sukuk was listed on Nasdaq Dubai. (Read more here)

“We don’t expect Damac to pay dividends before all sukuk are repaid, while we also find the scope for growth as challenging for Damac vis-à-vis changing demand/buyer dynamics,” Haidar added.

Damac Properties’ stock was trading 1.5 percent lower at 1.31 dirhams by 12:34 GST on Thursday, and has dropped 13.24 percent so far since the start of 2019.  This followed a 54.7 percent share price decline in 2018 (Read more here).

Haidar said that Damac’s Q4 numbers were “poor”, and that Arqaam Research maintains a “sell at 10x P/E (price/earnings)” on the developer.

In a press release accompanying its full-year results announcement, Damac Properties’ chairman, Hussain Sajwani, said that in 2018 the firm had “maintained our pace of completions, even as the market continues to correct itself”.

(Reporting by Gerard Aoun; Editing by Michael Fahy)

(Gerard.aoun@refinitiv.com)

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