Union Properties has posted a jump in net profit to $77,603 in Q2 2022 compared to a net loss of $326,752 in Q1 2022.
Revenue from contracts with customers remained stable at AED 99 million in Q2 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’s real estate sector. Gross profit for the same period increased 7% to AED 14 million.
The developer continued to make strong progress 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 AED 17 million in Q2 2022, and by 32% to AED 37 million in H1 2022, compared to the same period last year.
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 utilization, economies of scale and cost rationalization. The company expects to realize additional one-time cost savings of AED 7 million over the next 12 months from the reorganization.
Consequently, operating profit increased to AED 3 million in Q2 2022 from a loss of AED 36 million for the same period last year.
The company incurred finance costs related to legacy debt of AED 16 million, representing 14% of the company’s total consolidated costs. Debt restructuring remains a key priority for Union Properties’ management.
Management’s focus on efficiency has enabled Union Properties to preserve its book value at AED [1.9 billion], equivalent to AED 0.446 per share.