Dubai developer Union Properties turns to Q3 profit on debt restructuring plans | Tech Rasta

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Dubai-based developer Union Properties swung into profit in the third quarter of 2022, as its debt restructuring strategies gained momentum amid a rapid recovery in the emirate’s real estate market.

Net profit for the three months to the end of September reached Dh825,000 ($224,640) from a loss of more than Dh31 million in the same period a year ago, the company said in a regulatory filing on the Dubai Stock Exchange, where shares his. are sold.

Revenue from contracts with its customers grew nearly 3 percent annually to Dh101.2m, while other operating income increased by more than 21 percent to Dh3.4m, the developer said on Tuesday.

The company also significantly reduced its operating loss in the quarter to Dh578,000 from Dh8.2m a year earlier.

“We have maintained our strong growth trend in the third quarter of the building at a good pace in the first six months of 2022,” Amer Khansaheb, board member and managing director of Union Properties, said.

“We continue to see the positive benefits of our business turnaround strategy and remain confident that we will see further progress in the coming months.”

The company remains focused on “boosting growth and delivering cost efficiencies”, particularly at the subsidiary level.

“Looking ahead, we are very optimistic as we explore several development options that we hope will bring long-term value to our investors,” he said.

Union Assets ran into trouble last year after the UAE’s market regulator, the Securities and Commodities Authority, filed a complaint against its top executives in October, accusing them of forgery, abuse of power, fraud and causing damage to the company’s interests.

The review revealed “widespread fraud and misconduct by the company’s former executives involving forgery, misappropriation of funds and other financial irregularities,” Union Properties said.

That led the company to a loss of Dh966.76m in 2021, compared to a profit of Dh200.98m the previous year, despite an increase in revenue after adjusting for the value of its assets which “had been inflated in previous years”.

A new board was appointed in December and a full financial and accounting audit was carried out by a third party.

We continue to see the positive benefits of our business transformation strategy and remain confident that we will see further progress in the coming months.

Amer Khansaheb, board member and managing director of Union Properties

Last month, Union Property reached an agreement with its lenders to restructure Dh595m of debt, which it said would allow it to recapitalize the UAE property market. The deal, which was agreed by all parties, included a repayment of Dh223m to the company’s creditors.

The did not give details of its “comprehensive restructuring plan”, but insisted at the time that the move was a “major step” in its turnaround strategy.

Through the first nine months of 2022, Union Properties posted a loss of about Dh11.4m, from a profit of Dh1.34m in the same period last year, according to a dividend filing on Tuesday. Revenue, however, improved to Dh305m, up 3.4 per cent from Dh296m a year ago.

Operating profit in the third quarter of the year rose to more than Dh7.1m, from a loss of nearly Dh40m last year, it added.

Updated: November 01, 2022, 12:15 PM

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