Deyaar Development PJSC, a regional real estate company dedicated to innovation, customer care and long-term sustainability, announced today its financial results for the 12 months ending December 31, 2009.
Despite extremely challenging conditions globally, which have impacted the performance of the real economy worldwide and the property sector in particular, Deyaar continues to focus on its unique consolidation strategy, which has led to a reduced level of defaults and a higher paid-up value for each of the company’s sold and consolidated units. As a consequence, Deyaar has been able to reduce its level of provisioning related to receivables, leading to a continuously positive operational cash flow.
In line with global best practice, Deyaar has adopted a revenue recognition policy based on the recommendations of the International Accounting Standard Board (IASB) relating to the International Financial Reporting Interpretations Committee (IFRIC) 15 - Agreements for the Construction of Real Estate, to recognise revenue based on the completed contract method.
In the case of the completed contract method of revenue recognition, the revenue and related profit for a project sold are recognised when the project is handed over to customers.
Based on IFRIC 15 revenue recognition policy, the company’s gross revenues for the 12 months ending December 31, 2009, stood at AED 1.835 billion, an increase of 33 per cent compared to AED 1.382 billion in 2008 (restated as per IFRIC 15). The reported gross revenues of the company for 2008 (as per the percentage of completion methodology) was AED 2.956 billion.
Based on IFRIC 15 revenue recognition policy, Deyaar reported today a net profit of AED 30 million for the 12 months ending December 31, 2009, a decline of 95 per cent compared to AED 654.7 million in 2008 (restated as per IFRIC 15).
Based on company projects handed over in 2009, Deyaar’s total net profit before impairments and provisions and including pre-IPO profits reached AED 337 million. Of this, AED 207 million were profits attributable to the pre-IPO period and AED 100 million were for provisions and impairments. After the above adjustments, the company’s residual net profit for 2009 stands at AED 30 million. The net income reported for 2008 (following the percentage of completion methodology) was AED 1.104 billion.
The total equity of the company stands at AED 6.75 billion as at December 31, 2009.
“In the face of unprecedented threats to the stability of the global financial system, the worldwide real estate sector witnessed a range of significant challenges in 2009,” said Markus Giebel, Chief Executive Officer of Deyaar. “Despite such volatile conditions, Deyaar successfully handed over eight projects last year, including an AED 363 million project in Lebanon.
“In 2010, Deyaar will continue to focus on the completion of the consolidation of its projects and timely collections of its receivables at home in the UAE, while simultaneously identifying strategic expansion opportunities overseas, including potential future opportunities in regional markets such as Lebanon and Saudi Arabia,” he said.
“With six projects slated for handover this year and the ongoing completion of income-generating assets, in parallel to the continued stablisation of regional and international markets, we look forward to reporting continuous stable cash flows in 2010.
“Deyaar’s sound fundamentals and prudent operational strategy, including generating stable income from property management and leasing activities, places the company in a prime position to benefit from the global recovery. Moving ahead, we will continue to focus on providing innovative solutions that meet the evolving needs of our customers,” said Giebel.
