Union Properties posts Q3 profit

Union Properties posted a quarterly profit on Wednesday despite a decline in revenue, as the real estate developer stayed away from new projects to focus on existing developments.

The Dubai-listed firm made a third-quarter net profit of Dh50 million ($13.6 million) compared to a loss of Dh1.06 billion in the same period of 2011, according to a Reuters calculation.

The company, which reached a Dh3.8-billion debt deal with major shareholder Emirates NBD earlier this year, did not provide quarterly figures. Profit for the nine months to Sept. 30 was Dh156 million versus a net loss of Dh1.5 billion a year earlier, the firm said in a statement.

The increased profit reflected "improved market sentiment in the real estate sector", it added.

Union Properties, which has not undertaken new development work in recent years, said its revenue for the nine months dropped to Dh1.3 billion from Dh3.2 billion a year ago. The drop occurred because it booked most revenue from selling its Index Tower and Limestone House developments in 2011, it said.

Union Properties' total consolidated bank debt fell 41 per cent to Dh3.4 billion at the end of the third quarter from Dh5.8 billion a year earlier.

In January, the company said it would transfer assets worth Dh1.1 billion to Emirates NBD as part of the debt deal, while its remaining liabilities to the bank would be extended until 2017.

The company's shares were up 2 per cent after the earnings announcement.

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