By: Bedour El-Raie
Abu Dhabi – Mubasher: Eshraq Properties’ stock dropped significantly after an hour and a half of trading on the Abu Dhabi Securities Exchange (ADX) on Tuesday, following the company’s announcement of incurring losses of more than AED 500 million in its financials for fiscal year 2014.
The stock plunged 9.09% to AED 0.6, its lowest since its listing in September 2011. Around 4.6 million shares were traded through 69 transactions at a turnover of AED 2.75 million.
The stock brought the real estate sector down by 0.33%, despite Aldar’s gains of 0.84%.
Eshraq’s financials are both shocking and disappointing, said market analyst Waddah Taha, as the real estate company was expected to post a profit decline or minor losses. The Q4 losses resulted in an overall loss in 2014.
The company reported a loss of AED 536.8 million in 2014 against a net profit of AED 318.7 million in 2013, according to its filing to the ADX.
Revenues dropped 63% to AED 268.26 million against AED 716.6 million a year earlier.
The company attributed its losses to real estate revaluation.
Financial statements showed losses resulting from the cancellation of sale contracts and fair value losses from development projects and real estate investments reaching AED 696 million. These losses were not present in 2013, the company said.
The UAE firm previously reported a decline in profits during the first nine months of 2014, reaching AED 180.49 million against AED 269.65 million during the same period in 2013.
Eshraq said its losses were due to reducing the surface area approved by authorities in the company’s Abu Dhabi Gate project, Taha said, adding that any developer should receive preliminary approval before commencing operations.
The analyst also pointed to Eshraq’s problem with continuously changing its CEO shareholding, noting that although shareholding changes are allowed, they show instability in the company’s management and do not reflect a strong and clear strategy.
The company has scheduled its ordinary general meeting for 23 April; in the event of an incomplete quorum, a second meeting will be held on 30 April.
Translated by Nada Adel Sobhi
