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Dubai-based luxury developer and subsidiary of Saudi-based Dar Al Arkan, Dar Global, reported a USD 12.8 bn net loss in 1H 2024, compared to a USD 20.8 mn profit in 1H 2023, according to its earnings release on the London Stock Exchange. The luxury real estate developer saw its revenue fall 59% y-o-y to USD 44.5 mn during the period. Sales were up 62.5% y-o-y to USD 1.3 bn during the period.
Behind the drop: The decline in revenue and profitability is attributed to several early-stage developments where revenue has yet to be realized. However, the company expects a stronger performance in the 2H 2024 and into 2025 as these revenues materialize.
REMEMBER- In real estate, sales ≠ revenues. With off-plan sales dominating the industry, most real estate companies book a sale when you sign a contract to buy a home. But they only record (some or all) of the value of the unit it sold you when it (a) delivers the unit to you or (b) hits a percentage completion on a total project. In most cases, then, revenues are composed of sales from past periods, while sales in a given quarter will be recognized as revenues in the future when units are completed or delivered.
What they said: “We are pleased to reiterate our target of delivering at least USD 700 mn of revenue across FY 2024 and FY 2025,” said CEO Ziad El Chaar.
Dar Global made a lot of key investments during the period, including the launch of the AED 900 mn Astera beachfront residences in Ras Al Khaimah with Aston Martin, and new Trump Towers in Jeddah and Dubai. The company also secured a 37-hectare lagoon in the Maldives for the first Dolce & Gabbana resort and expanded its Dubai portfolio with residential villas in Jumeirah Golf Estate.
