The stock markets in the UAE edged down in early trade on Sunday, as two major real estate companies posted disappointing quarterly results as the property market continues to witness a slowdown.
However, an Abu Dhabi-based developer reported a 179 per cent increase in net profit for the first six months.
Dubai’s index lost 0.8 per cent and Arabtec, the most traded stock, fell four percent after it reported a net loss of AED718.3 million during the period between April 1 to June 30, having made a profit in the same period last year of AED102.4m, Reuters said in a report.
Two analysts polled by Reuters had forecast Arabtec to make a quarterly profit of AED88.4m and AED90.6m respectively.
The company made a net loss of AED1.3 billion for the first six months of 2015, compared with an AED265m profit in the year earlier period.
“The group has recently taken significant measures to reduce SG&A (sales, general and administrative) costs, implementing an extensive restructuring programme aimed at reaching the highest levels of operational efficiency,” the company said in a statement issued to Dubai Financial Market.
After booming for the last few years in a strong recovery from its crash in August 2008, the city’s residential property market lost steam this year due to the new supply of residential units and falling global oil prices. Weakening investor sentiment and the devaluation of the Russian rouble also contributed to the downfall.
Meanwhile, the Abu Dhabi Security Exchange’s main index fell 0.2 per cent as Eshraq Properties, whose projects include residential developments on Al Reem Island, announced that its profit in the second quarter dropped 97 per cent as revenues shrank.
The company had reported an AED7.97m loss for the first three months of 2015 – down from a AED42.7m profit a year earlier; its revenue had tumbled by almost 90 per cent during the period.
However, Manazel Real Estate’s profit for the first half of the year increased to AED45m while it was AED16m a year earlier. Revenue was at AED262.8m, down eight per cent from AED 284.5m as it handed over its Al Reef Downtown project in the same period a year ago.
Manazel’s Chairman Mohamed M. Al Qubaisi said in a statement to the Abu Dhabi exchange that his firm has made “significant progress both in terms of restructuring its business in order to focus on the significant growth opportunities in new and dynamic market sectors, which will capitalise on our expertise in the residential and commercial real estate sectors.”