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Damac plans 15 per cent cash dividend payout for second half of year

The Dubai-based developer Damac Properties proposes to pay a 15 per cent cash dividend for the second half of last year, bringing the total to 25 per cent for the year.

The company is recommending that shareholders approve the 15 per cent dividend payment at its forthcoming annual general meeting based on its performance during the second half of last year.

Shareholders had already received an interim payment of 10 per cent for the first half of the year, as well as being awarded a further 10 per cent in bonus shares. A spokesman for Damac said that it is maintaining its guidance target first set in 2014, which stated that it would propose to pay a dividend of at least 25 per cent in cash both last year and this year.

Last month, Damac announced that its full-year pro­fit increased by 40.6 per cent to Dh4.5 billion – up from Dh3.2bn a year earlier.

Revenue more than doubled to Dh8.5bn. Fourth-quarter profit fell by 8 per cent, however, to Dh842.8 million and the company’s chairman, Hussain Sajwani, said that it faced a “challenging economic environment”, citing the lower oil price and currency fluctuations as factors.

Despite this, Mr Sajwani, who retains a 72.2 per cent stake in Damac, said the environment was “very different to the one we faced in 2008” – it was ex­periencing consolidation rather than a decline. He pointed to a shortfall in supply against expectations, with only 8,000 of an antici­pated 25,000 new homes that were handed over in Dubai last year.

“We expect the total supply in Dubai to again fall short of 10,000 new units in 2016, eventually driving the market back into positive pricing growth territory, perhaps towards the second half of the year or early 2017,” Mr Sajwani said.

Fellow Dubai-listed developers Emaar Properties, Deyaar Development and Union Properties have yet to announce final dividends for last year, but Abu Dhabi-based Aldar Properties said when publishing its financial results last month that it ex­pected to increase its dividend from 9 per cent in 2014 to 10 per cent.

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