The board of Dubai’s property developer Deyaar has recommended against capital reduction after accumulated losses have topped 1.75 billion dirhams ($476 million).
In a statement to the Dubai Financial Market (DFM), the company said members had agreed that if necessary, they would recommend that shareholders do not proceed with the measure.
According to a detailed analysis of the company’s finances, the COVID-19 pandemic resulted in a loss of 216.9 million dirhams for 2020.
The losses were also attributed to the provisions for impairment of assets “due to the real estate market situation in Dubai recorded in 2010.
In addition, the company applied at the start of 2018 the International Financial Reporting Standard 9 (IFRS 9) and this resulted in provisions for certain assets amounting to 661 million dirhams.
Accumulated losses are now 30.26 percent of capital ratio as of December 31, 2020, the analysis said.
Addressing the losses
Measures taken to address the losses include diversifying the company’s income through property and facilities management. Three hospitality projects are expected to increase revenue in the coming years, the company said.
Last week, chief executive officer Saeed Al Qatami said the hospital sector posed the biggest challenge to the company in 2020, but said he was optimistic the sector will recover.
(Reporting by Imogen Lillywhite; editing by Cleofe Maceda)
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