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Dubai-based developer Union Properties reported net profit for the second quarter of 2022 as its turnaround strategy enabled significant cost savings.
Revenue from contracts signed with clients remained stable at AED 99 million in the second quarter of 2022 compared to the same period last year, as the group’s subsidiaries delivered healthy performance improvements supported by strong market dynamics in the UAE real estate sector. Gross profit rose 7% to AED14 million in the same period, the company said.
Union Properties continued to make significant progress in executing its turnaround strategy, achieving significant cost benefits in the second quarter of this year. Administrative and general expenses fell 42% year-on-year to AED17 million in the second quarter of 2022 and 32% to AED37 million in the first half of 2022, compared to the same period last year.
As part of its ongoing strategy to improve efficiency and productivity across the business, Union Properties has consolidated its three existing business units – Edacom Owners Management Association, Uptown Mirdiff Mall and Al Etihad Cold Store – into a single entity, Edacom Asset Management. The merger is expected to improve profitability by driving efficient resource and asset utilization, economies of scale and cost rationalization.
It said the company expects to realize additional one-time cost savings of Dh7 million over the next 12 months after the restructuring.
As a result, operating profit increased from a loss of AED36 million in the same period last year to AED3 million in the second quarter of 2022. In terms of net income, Union Properties achieved a net profit of AED285,000 in Q2 2022 (Q2 2021: AED26 million), compared to a net loss of AED12 million in the previous quarter , although the finance cost related to legacy debt was AED 160,000, or 14% of the company’s consolidated costs. It added that debt restructuring remains a key priority for United Property Management.
Management’s focus on efficiency kept United Properties’ book value at AED1.9 billion, equivalent to AED0.446 per share.
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 focused on driving growth and delivering cost efficiencies, particularly At the subsidiary level. Notably, we have initiated several initiatives to optimize performance across the business, including the consolidation of our three business units into Edacom Asset Management, which is expected to deliver significant savings over the remainder of the year Costs. Ongoing work provides a solid foundation for future growth and value creation for our shareholders.
“Union Properties has a large land bank and is located in a fast-growing area that is becoming increasingly popular and popular with investors and residents. Going forward, we are cautiously optimistic as we explore a number of developments that we hope will create long-term value for investors choose.”
On October 24, 2021, Union Properties disclosed to the Dubai Financial Market an arbitration claim by one of its subsidiaries, which is still under review by the arbitral tribunal. It said it would continue to keep the market and shareholders informed of any further developments as part of the company’s commitment to transparency. – arab trade news agency
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