Deyaar didn't give a percentage change from 2008 Q1 in this press release about 2009 Q1 profits. Not surprising really since it's a 75% fall from Deyaar 2008 Q1 profit of AED 200m, and about an 85% drop from Deyaar 2008 Q4 profit of AED340m
Press Release 26 April 2009:
Deyaar reports first quarter net profit of AED 54.48 million
• Q1 revenues reach AED 470 million
• Results in line with company forecasts and budget
• Reports positive operational cash flow; outstanding advances to contractors of AED 279 million
• Seven projects to be handed over this year
Dubai - Deyaar Development PJSC (DEYAAR), a regional real estate company dedicated to innovation, customer care and long-term sustainable growth, announced today its financial results for the three months ending March 31, 2009, demonstrating consistent profitability and strong core operations despite extremely challenging market conditions.
Deyaar’s net profit for the first three months of this year reached AED 54.48 million, in line with the company’s earlier forecasts and current budgetary priorities. During the same period, Deyaar’s gross revenues reached AED 470 million. Deyaar’s total shareholders’ equity stood at AED 7.34 billion, while total assets reached AED 11.38 billion.
The company also reported today that it continues to maintain a positive operational cash flow. In an especially clear indication of Deyaar’s financial strength, the company noted that its net outstanding advances to contractors stood at AED 279 million as of March 31, 2009.
While the repercussions of the global financial crisis impacted the company’s financial performance during the period, Deyaar continues to move forward with its 2009 strategy, which was announced earlier this year.
Reinforcing its commitment to its customers, the company will deliver seven projects in the UAE this year, comprising nearly 4 million square feet of units. The first of those projects to be completed, Madison Residency in the Technology, E-Commerce and Media (TECOM) free zone, will be handed over to customers next month.
“On behalf of Deyaar, I am very pleased to share our financial results for the first quarter, which are in line with our expectations and reflective of our sound fundamentals,” said Markus Giebel, Chief Executive Officer of Deyaar. “Safeguarding the interests of our customers and preserving our strong capital position remain at the heart of our business strategy, and we remain fully committed to those goals. We look forward to delivering a range of projects over the course of this year.”
PE (annualised) 17 2.1 18.2 7% 780%
Price to Book Value (PBV) 2.2 0.4 0.5 -76% 39%
Profit Margin (ROS) 44% 51% 11% -74% -78%
Return on Assets (ROA) 8.7% 12% 1.9% -79% -84%
Return on Equity (ROE) 13% 18% 2.9% -77% -84%
PE, ROA, and ROE are annualised figures
How is Deyaar looking? Healthy and worth investing in?
Well, at the end of 2009 Q1, Deyaar had about AED 800m in cash, just over AED 1 billion in accounts receivable, and another 9+ billion in property and other less liquid assets, including just under AED 1 billion of goodwill (which is effectively nothing if they have their backs to the wall). Accounts payable is almost AED 1.9 billion which is not good for Deyaar's suppliers and contractors since that's cash they're not getting from Deyaar. And if large developers don't want to pay their bills, apparently they are allowed to drag their feet for months. Good for Deyaar shareholders though since they won't have to worry about Deyaar's accounts payables sinking them.
Deyaar's outstanding liabilities are a different story though, there's just over AED 1 billion worth of Islamic finance, and Term finance. No further information obvious in the accounts as to when these outstanding liabilities are due.
Deyaar's cost of sales have shot up. Despite little change in revenue compared to the previous year, (AED 470m in 2009 Q1 vs AED 460m in 2008 Q1), Gross Profit plummeted over 50%, and that helped drive down Net Profit by over 70%. Deyaar's other expenses are up to about AED 70m for the quarter. If we use that to estimate that they need AED 250 - AED 300 for the year to cover fixed expenses (and ignore COGS since that's covered by revenue), what happens if everything just stops?
Looks like Deyaar could be in a bit of bother. Their cash doesn't cover their outstanding finance liabilities, let alone other expenses. And if they put receivables up against payables, they will still be short almost AED 1 billion. Looks like they need to hold off their creditors for some time, or get a good bit of refinancing.
Anyone else care to comment? Especially if you can find a more positive outlook for Deyaar ...
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