Firm says it has launched a number of initiatives to optimise performance across the business, including the consolidation of three business units into EDACOM Asset Management
Developer Union Properties has announced its consolidated financial results for the three-month period ended 30 June 2022, with the company seeing a net profit for the second quarter, following a net loss in the first quarter of the year.
In a statement, Union Properties said that the company had delivered a net profit of $77,593 in Q2 2022, as compared to a net loss of $3.26mn in Q1 2022. Revenue from contracts with customers remained stable at $ 26.95mn in Q2 2022 compared to the same period last year.
The performance is said to be due to the group’s subsidiaries delivering healthy performance improvements, supported by strong market dynamics in the UAE’s real estate sector. Gross profit for the same period increased by 7% to $3.81mn, the statement continued.
In September 2021, the developer said it had agreed to exit the ownership of the under construction Motor City shopping centre.
Amer Khansaheb, Board Member and Managing Director of Union Properties, commented, “The continued improvement in Union Properties financial performance reflects our success to date in executing our turnaround strategy. We remain laser focused on driving growth and delivering cost efficiencies, particularly at a subsidiary level.”
“Of note, we have launched a number of initiatives to optimise performance across the business, including the consolidation of three of our business units into EDACOM Asset Management, which is expected to deliver significant cost savings over the remainder of the year. The work underway lays a solid foundation for future growth and value creation for our shareholders,” he added.
Khansaheb highlighted the progress made by Union Properties in the execution of its turnaround strategy, delivering significant cost efficiencies during the second quarter of the year. Administrative and general expenses declined by 42% year-on-year to $4.62mn in Q2 2022, and by 32% to $10.07mn in H1 2022, compared to the same period last year.
The developer broke ground on the first phase of a new development in Motor City in September 2021.
As part of its ongoing strategy to improve efficiency and productivity across the business, Union Properties merged three of its existing business units – EDACOM Owners Management Association, Uptown Mirdiff Mall, and Al Etihad Cold Store – into one single entity, EDACOM Asset Management. The consolidation is expected to improve profitability by driving efficient resource and asset utilisation, economies of scale and cost rationalisation. The company expects to realise additional one-time cost savings of $1.90mn over the next 12 months from the reorganisation.
Consequently, operating profit increased to $816,768 in Q2 2022 from a loss of $9.80mn for the same period last year. At the net income level, Union Properties delivered a net profit despite incurring finance costs related to legacy debt of $4.35mn, representing 14% of the company’s total consolidated costs. Debt restructuring remains a key priority for Union Properties’ management, the statement added.
“Union Properties owns a vast land bank, in a fast-developing location, which is gaining traction and popularity with investors and residents. Looking ahead, we are cautiously optimistic as we explore a number of development options that we expect to generate long term value for our investors,” Khansaheb concluded, adding that the developer’s focus on efficiency has enabled Union Properties to preserve its book value at $517.2mn, equivalent to AED 0.446 per share.
In October last year, the Dubai Autodrome announced the completion of the $4.49mn Business Park Phase 2 Project.