13th May 2014
DAMAC REAL ESTATE DEVELOPMENT LIMITED
FIRST QUARTER RESULTS SHOW CONTINUED STRONG PERFORMANCE IN 2014
DAMAC Real Estate Development Limited (LSE: DMC) (“DAMAC” or the "Company"), a leading
developer of high-end and luxury residential property in the Middle East, announces unaudited interim results
for the three months ending 31 March 2014.
FINANCIAL HIGHLIGHTS
 Recognized revenue grew by 94% to $436 million in Q1 2014 (Q1 2013: $225 million) primarily
comprising income attributed to the completion and handover of Cosmopolitan and Water’s Edge, as well
as from the land portion of villa sales in AKOYA of $173 million.

Gross profit increased by 89% to $268 million (Q1 2013: $142 million), with a 79% growth in net
profit to $210 million (Q1 2013: $117 million); both driven by the growth in recognized revenues.
Gross margin remained strong at 61.4%.

Operating profit increased by 76% to $205 million (Q1 2013: $117 million). This reflects the growth in
general and administrative expenses to $50 million (Q1 2013: $24 million), as well as selling expenses
and brokerage and commissions to $14 million (Q1 2013: $2 million) due to the increase in sales
activities and number of staff as business levels expand.

Cashflow generated from operations grew to $308 million (Q1 2013: $41 million) driven mainly by
higher booked sales resulting in increased cash collection from customers during the quarter.

Total assets stood at $3,526 million as at 31 March 2014, representing growth of 16% compared to 31
December 2013, primarily led by an increase in cash and bank balances.

The development portfolio stood at $1,916 million, as at 31 March 2014, having reduced marginally
from 31 December 2013 due to the handover of units during Q1 2014.

Total shareholder equity increased by 32% from 31 December 2013 to $869 million at 31 March 2014.

Net cash position stood at $829 million as at 31 March 2014 (31 December 2013: $493 million), net of
gross debt of $150 million (31 December 2013: $85 million). Increase in gross debt resulted from an
increase in short term bank borrowings.

Advances from customers stood at $1,860 million as at 31 March 2014, compared to $1,715 million as
at 31 December 2013. The increase was mainly due to higher booked sales and cash collection from
customers in Q1 2014.

Successful closing of $650 million Sukuk in April 2014 (5 year note at a fixed coupon of 4.97% per
annum).
OPERATIONAL HIGHLIGHTS
 Booked sales increased 153% to $864 million (Q1 2013: $341 million). Sales remain strong at AKOYA
by DAMAC and DAMAC Towers by Paramount.

577 units completed and delivered during the period, with estimated total deliveries for 2014 of between
4,000 to 5,000 units.

Good construction progress is being made across the portfolio. At DAMAC Towers by Paramount
(almost 2,000 keys) all upper ground floor slabs for all four towers are cast and the core walls are up to
level podium 3.

At AKOYA by DAMAC, main contractors are working on villas and low rise apartments, ongoing
construction on the 132KV substation and site infrastructure work. The Trump International Golf Course
is also progressing well; shaping and grading is underway and it is expected that the course will be fully
grassed by Q1 2015.

New projects launches during the quarter including:
- The Trump Estates in AKOYA by DAMAC, a limited collection of 104 villas and mansions
- Celestia, a development of luxury serviced apartments in Dubai World Central
- Subsequent to the period end, DAMAC launched the Downtown at AKOYA development and
Constella, which is in Jumeirah Village and comprises the first officially certified Sharia compliant
hotel apartments in Dubai, in May 2014
- DAMAC also introduced a new hotel brand, ‘NAIA by DAMAC’, as a high quality, complementary
brand to its DAMAC Maison Hotels and Hotel Apartments business. It is expected that NAIA by
DAMAC will ultimately manage c. 3,800 units of the company’s hospitality offering of c. 10,000
keys.
* All Dollar figures in this statement are United States Dollars
Hussain Sajwani, Executive Chairman and Chief Executive Officer of DAMAC, commented: “The
continued economic recovery in our core market of Dubai has supported strong sales in the first quarter of
2014, contributing to another good performance from DAMAC and a highly profitable start to the year, as
well as substantial growth in net assets. We continue to see solid levels of demand in the luxury market,
which is reflected in the growth in rental levels and residential values. We continue to look for suitable new
land parcels ensuring we can provide supply to meet demand.
“Dubai is forecast to see continued economic growth as stated by the International Monetary Fund (IMF)
anticipating that the economic growth in the UAE is expected to remain strong at 4.5% in 2014. This growth
will sustain demand for further residential property, both from owner occupiers and in the rental market, as
well as for hotel and leisure space.
“We have responded to this by reweighting our development portfolio to include a greater proportion of hotel
and serviced hotel apartment projects, which now represent c.40% of our total pipeline.
“Having successfully closed a $650 million Sukuk we are well capitalised to increase our land bank, allowing
us to capitalise on the strength of the Dubai market. The outlook in our markets remains positive, and we are
well on track to deliver strong results to our shareholders.”
-endNOTES TO EDITORS:
DAMAC is a leading developer of high-end property in the Middle East, with a strong track record in Dubai
and a growing presence in other markets in the Middle East. Its award-winning developments include some of
the most iconic buildings in Dubai's luxury property sector, and its brand is widely recognised throughout the
region. DAMAC operates primarily in the residential segment of the luxury property sector but has also
developed a limited number of mixed-use and commercial properties. DAMAC continually adapts its product
offering in response to its customers' demands and is currently expanding the appeal of and demand for its
residential units by adding to its products on offer (i) fully serviced apartments and villas; (ii) apartments and
villas that are co-branded with premium brands such as FENDI Casa, Versace Home and Paramount Hotels &
Resorts; and (iii) villas and apartments in luxury lifestyle community developments such as its AKOYA by
DAMAC project.
Damac Real Estate Development Limited, DIFC
Dubai - United Arab Emirates
Interim condensed consolidated financial
information and review report
for the three month period ended
31 March 2014
Damac Real Estate Development Limited, DIFC
Dubai, U.A.E.
Table of contents
Pages
Report on review of interim condensed consolidated financial information
1
Interim consolidated statement of financial position
2
Interim consolidated statement of comprehensive income
3
Interim consolidated statement of changes in equity
4
Interim consolidated statement of cash flows
5
Notes to the interim condensed consolidated financial information
6 - 19
Damac Real Estate Development Limited, DIFC
Dubai, U.A.E.
3
Interim consolidated statement of comprehensive income
For the period ended 31 March 2014
Notes
Revenue
Cost of Sales
14
Gross profit
Other operating income
General, administrative and selling expenses
Brokerage and commission
Depreciation
Operating profit
Other income
Finance income
Finance costs
Profit for the period
Other comprehensive income
Items that will not be reclassified subsequently to
profit or loss
Items that maybe reclassified subsequently to
profit or loss
- Revaluation reserve recycled to disposal of
financial investments
1 January to
31 March 2013
(3 months)
(Unaudited)
US$ Million
435.8
(168.3)
--------------------------------267.5
2.2
(49.9)
(13.9)
(1.0)
--------------------------------204.9
2.5
3.0
(0.8)
--------------------------------209.6
224.6
(82.9)
--------------------------------141.7
1.7
(23.7)
(2.2)
(0.8)
--------------------------------116.7
2.0
0.4
(1.7)
--------------------------------117.4
-
-
-
0.5
Total comprehensive income for the period
Earnings per ordinary share
Basic and diluted (US Cents)
1 January to
31 March 2014
(3 months)
(Unaudited)
US$ Million
17
--------------------------------210.1
==============
--------------------------------117.4
==============
32
==============
N/A
==============
The accompanying notes form an integral part of these interim condensed consolidated financial information.
Damac Real Estate Development Limited, DIFC
Dubai, U.A.E.
4
Interim consolidated statement of changes in equity
For the period ended 31 March 2014
Balance at 1 January 2013 (audited)
Profit for the period
Other comprehensive income for the period
Balance at 31 March 2013
Balance at 1 January 2014 (audited)
Profit for the period
Other comprehensive income for the period
Balance at 31 March 2014
Share
capital
(Unaudited)
US$ Million
Statutory
reserve
(Unaudited)
US$ Million
Group
restructuring
reserve
(Unaudited)
US$ Million
Investment
revaluation
reserve
(Unaudited)
US$ Million
Retained
earnings
(Unaudited)
US$ Million
Total
(Unaudited)
US$ Million
86.4
-------------------------86.4
===========
41.0
-------------------------41.0
===========
-------------------------===========
-------------------------===========
12.5
117.4
-------------------------129.9
===========
139.9
117.4
-------------------------257.3
===========
650.0
-------------------------650.0
===========
41.3
-------------------------41.3
===========
(566.7)
-------------------------(566.7)
===========
534.0
209.6
0.5
-------------------------744.1
===========
659.1
209.6
-------------------------868.7
===========
The accompanying notes form an integral part of these interim condensed consolidated financial information.
0.5
(0.5)
-------------------------===========
Damac Real Estate Development Limited, DIFC
Dubai, U.A.E.
5
Interim consolidated statement of cash flows
For the period ended 31 March 2014
Cash flows from operating activities
Profit for the period
Adjustments for:
Depreciation on property and equipment
Provision for employees' end-of-service indemnity
Loss on disposal of financial investments (Note 7)
Finance costs
Finance income
Reversal of impairment on trade receivables
Operating cash flows before changes in working capital
Increase in trade and other receivables
Decrease in development properties
Decrease in due from related parties
Increase/(decrease) in trade and other payables
Decrease in due to related parties
(Increase)/decrease in other financial assets
Cash generated from operations
Finance costs paid
Interest received
Employee end-of-service indemnity paid
Net cash generated from operating activities
Cash flows from investing activities
Purchase of property and equipment
Increase in deposits with original maturity of greater
than three months
Proceeds from disposal of financial instruments
Net cash generated from/(used in) investing activities
Cash flows from financing activities
Net drawdown of bank borrowings
Net cash generated from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period (Note 8)
1 January to
31 March 2014
(3 months)
(Unaudited)
US$ Million
1 January to
31 March 2013
(3 months)
(Unaudited)
US$ Million
209.6
117.4
1.0
0.6
0.3
0.8
(3.0)
(3.8)
--------------------------------205.5
(105.2)
16.9
210.8
(1.2)
(21.4)
--------------------------------305.4
(0.8)
3.0
(0.1)
--------------------------------307.5
---------------------------------
0.8
0.4
1.7
(0.4)
--------------------------------119.9
(19.0)
13.9
439.1
(84.1)
(441.8)
14.6
--------------------------------42.6
(1.7)
0.4
(0.4)
--------------------------------40.9
---------------------------------
(2.1)
(0.8)
(4.3)
30.4
--------------------------------24.0
---------------------------------
(7.9)
--------------------------------(8.7)
---------------------------------
64.8
--------------------------------64.8
--------------------------------396.3
13.6
--------------------------------13.6
--------------------------------45.8
545.7
--------------------------------942.0
==============
105.8
--------------------------------151.6
==============
The accompanying notes form an integral part of these interim condensed consolidated financial information.
Damac Real Estate Development Limited, DIFC
Dubai, U.A.E.
6
Notes to the interim condensed consolidated financial information
For the period ended 31 March 2014
1.
General information
DAMAC Real Estate Development Limited, DIFC (the “Company”) was incorporated on 31 October
2013 as a Company Limited by shares (registration number 1476) with the Registrar of Companies of the
Dubai International Financial Centre (the “DIFC”) under the Companies Law, DIFC Law No. 2. The
registered address of the Company is Office No. 206A, Level 2, Park Towers, Dubai International
Financial Centre, P.O. Box 2195, Dubai, United Arab Emirates.
The Parent and its subsidiaries (collectively the ‘‘Group’’) are involved in the development of properties
in the Middle East.
The Parent is controlled by Mr. Hussain Ali Habib Sajwani (the “Chief Executive Officer” and
“Executive Chairman”).
2.
Basis of preparation
Statement of compliance
The interim condensed consolidated financial information of the Group has been prepared in accordance
with IAS 34 Interim Financial Reporting.
Functional and reporting currency
The interim condensed consolidated financial information is presented in United States Dollars (“US$”)
which is the Group’s reporting currency. The individual financial information of each Group entity is
prepared in local currency, being the currency in the primary economic environment in which these
entities operate (the functional currency).
Basis of consolidation
The consolidated financial statements are prepared under the historical cost convention, except for certain
financial instruments that have been measured at fair value. The principal accounting policies adopted in
the preparation of these consolidated financial statements are set out below. These policies have been
consistently applied to all periods presented.
The Company consolidated 100% of the operations, assets and liabilities of the subsidiaries listed below
which in total are 83 (31 December 2013: 77) companies (together the “Group”).
Entity
Global Properties Company Limited
Middle East Properties Company
Limited
Damac Fortune Properties Company
Ltd
Damac General Trading LLC
Damac Properties Development Co.
LLC
Country of
incorporation
Dubai, U.A.E.
Dubai, U.A.E.
Dubai, U.A.E.
Dubai, U.A.E.
Dubai, U.A.E.
Principal
activities
Real estate
development
Real estate
development
Real estate
development
Holding company
Holding company
Legal
interest
100%
Economic
interest
100%
100%
100%
100%
100%
100%
100%
100%
100%
Damac Real Estate Development Limited, DIFC
Dubai, U.A.E.
7
Notes to the interim condensed consolidated financial information
For the period ended 31 March 2014 (continued)
2.
Basis of preparation (continued)
Basis of consolidation (continued)
Entity
Damac Properties Co. LLC
Marina Terrace Co. LLC
Country of
incorporation
Dubai, U.A.E.
Dubai, U.A.E.
Damac Gulf Properties LLC
Dubai, U.A.E.
Lake Terrace Co. LLC
Dubai, U.A.E.
Damac Star Properties LLC
Dubai, U.A.E.
Island Oasis Properties LLC
Dubai, U.A.E.
Damac Crescent Properties LLC
Dubai, U.A.E.
Damac Development LLC
Dubai, U.A.E.
Damac Heritage Properties Co LLC
Dubai, U.A.E.
Damac Luxury Real Estate
Properties Co LLC
Damac Crescent Properties Co LLC
Dubai, U.A.E.
The Waves FZ LLC
Dubai, U.A.E.
Damac Real Estate Developers FZ
LLC
Damac Properties FZ LLC
Dubai, U.A.E.
Damac Lake View Company
Limited
Damac Properties Company Limited
Dubai, U.A.E.
Damac Park Towers Company
Limited
Damac Crown Properties Company
Limited
Damac Properties Company Limited
Dubai, U.A.E.
Damac Properties Qatar WLL
Valencia Development Company
WLL
Qatar
Bahrain
Dubai, U.A.E.
Dubai, U.A.E.
Dubai, U.A.E.
Dubai, U.A.E.
Saudi Arabia
Principal
activities
Holding company
Real estate
development
Real estate
development
Real estate
development
Real estate
development
Real estate
development
Real estate
development
Real estate
development
Real estate
development
Real estate
development
Real estate
development
Real estate
development
Real estate
development
Real estate
development
Real estate
development
Real estate
development
Real estate
development
Real estate
development
Real estate
development
Holding company
Real estate
development
Legal
interest
100%
100%
Economic
interest
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Damac Real Estate Development Limited, DIFC
Dubai, U.A.E.
8
Notes to the interim condensed consolidated financial information
For the period ended 31 March 2014 (continued)
2.
Basis of preparation (continued)
Basis of consolidation (continued)
Entity
Damac Investment & Properties
(Jordan) LLC
Damac Properties Lebanon SAL
Country of
incorporation
Jordan
Lebanon
Principal
activities
Real estate
development
Real estate
development
Real estate
development
Real estate
development
Holding company
Facilities
management
Facilities
management
Sales office
Legal
interest
100%
Economic
interest
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
49%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Alaam Al-Dariha General Trading
Limited
Malak Al Rafidayn Properties
Investment
Tilal Development Holding SAL
Luxury Facilities Management Co.
LLC
Luxury Owner Association
Management Services
Damac Properties Services Co. Shj
LLC
Damac Real Estate Services Co LLC
Elegance Marketing Co LLC
Iraq
Damac Homes LLC
Dubai, U.A.E.
Damac Ocean Heights Co. LLC
Damac Star Properties LLC (Branch)
Morouj Rotana
Royal Crown Properties Co. LLC
Frontline Investment Management
Co. LLC
Damac Ocean Heights Co. LLC
(Branch) OH
Damac Star Properties LLC (Branch)
Al Seef
Ocean Pearl Real Estate Company
LLC
Middle East Dubai
Premier Vision Property
Development
Heritage Properties
Al-Imaratieh Properties LLC
Dubai, U.A.E.
Dubai, U.A.E.
Holding company
Marketing and
public relations
Group treasury
operation
Sales office
Sales office
Dubai, U.A.E.
Dubai, U.A.E.
Holding company
Shell company
100%
100%
100%
100%
Dubai, U.A.E.
Sales office
100%
100%
Dubai, U.A.E.
Sales office
100%
100%
Dubai, U.A.E.
Real estate
development
Shell Company
Shell company
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Damac Lebanon SAL (Holding)
Al Hikmah International Enterprises
LLC
Lebanon
Qatar
Shell company
Real estate
development
Holding company
Project
development
100%
49%
100%
100%
Iraq
Lebanon
Dubai, U.A.E.
Dubai, U.A.E.
Dubai, U.A.E.
Dubai, U.A.E.
Dubai, U.A.E.
Qatar
Qatar
Qatar
Jordan
Damac Real Estate Development Limited, DIFC
Dubai, U.A.E.
9
Notes to the interim condensed consolidated financial information
For the period ended 31 March 2014 (continued)
2.
Basis of preparation (continued)
Basis of consolidation (continued)
Entity
Al Aman Investment Management
Co. LLC
Damac Properties International Ltd.
Excel Operations Company Limited
Damac Hotels Management LLC
Country of
incorporation
Dubai, U.A.E.
Principal
activities
Holding company
Legal
interest
100%
Economic
interest
100%
Mauritius
Dubai, U.A.E.
Dubai, U.A.E.
Holding company
Holding company
Hotels
management
Real estate
development
Sales office
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Shell company
Facilities
management
Holding company
Shell company
Trust arrangement
Investment
company
Sales office
Holding company
Holding company
Holding company
Trading company
Shell company
Shell company
Real estate
development
Shell company
Shell company
Sales office
Trade marks
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
99%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Trade marks
Marketing and
public relations
Holding company
Real estate
development
Real estate
development
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Namaa Properties Development LLC
Dubai, U.A.E.
Damac Properties Company Limited
(Branch)
Quality Investment Co LLC
Luxury Facilities Management Co.
LLC (Branch)
Maksab Holding Limited
Kings Valley Investment Co LLC
Blue Eagle Investment Co LLC
Majara Investments Limited
Saudi Arabia
Star Luxury LLC
Damac FC Holding Co Ltd
Damac TR Holding Co Ltd
Damac Tuscan Residence LLC
Prosperity Trading WOFE
Daman Holding Limited*
Arjann Holdings Limited
Damac Ocean Heights Company
Limited
Bright Gulf Investments Limited
Accredited Holding Limited
Ali Habib Kukar's Real Estate Office
Damac Enterprises & Management
Co. LLC
Damac Enterprises Co. Ltd
Damac Media And Marketing LLC*
Russia
Dubai, U.A.E.
Dubai, U.A.E.
Dubai, U.A.E.
China
BVI
BVI
Dubai, U.A.E.
Sadaf Investment Limited
Damac Ocean Heights Co. LLC
(Branch) - Signature Tower*
Damac Properties Company Limited
- (Dammam Branch)*
Dubai, U.A.E.
Dubai, U.A.E.
Dubai, U.A.E.
Dubai, U.A.E.
BVI
Dubai, U.A.E.
Dubai, U.A.E.
BVI
BVI
BVI
Saudi Arabia
Dubai, U.A.E.
Mauritius
Dubai, U.A.E.
Saudi Arabia
Damac Real Estate Development Limited, DIFC
Dubai, U.A.E.
10
Notes to the interim condensed consolidated financial information
For the period ended 31 March 2014 (continued)
2.
Basis of preparation (continued)
Basis of consolidation (continued)
Entity
Damac Ocean Heights Company
Limited*
Damac Maison the Summit Hotel
Apartments LLC*
Priority Holding Limited*
Alpha Star Holding Limited*
Country of
incorporation
Maldives
Dubai, U.A.E.
Cayman Islands
Cayman Islands
Principal
activities
Hotels
management
Hotels
management
Holding company
Holding company
Legal
interest
100%
Economic
interest
100%
100%
100%
100%
0%
100%
100%
* These are newly incorporated entities that became part of the Group during the period ended 31 March
2014.
Business combination under common control
On 3 December 2013, the Company became the legal holding company of DAMAC Properties
Development Co. LLC, DAMAC General Trading LLC, Kings Valley Investment Co. LLC, DAMAC
Tuscan Residences LLC and DAMAC Properties International Limited, Mauritius, together with their
underlying subsidiaries. As explained in Note 2 of the consolidated financial statements of the Group for
the year ended 31 December 2013, this transaction falls outside the scope of IFRS 3 Business
Combinations, therefore the pooling of interests method was applied and the interim condensed
consolidated financial information of the Group is presented as a continuation of the “Combined Group”.
The following accounting treatment was applied:
a) the assets and liabilities of the “Combined Group” were recognised and measured in the consolidated
financial statements at the pre-combination carrying amounts, without restatement to fair value;
b) the retained earnings and other equity balances of the “Combined Group” immediately before the
business combination, and the results for the period from 1 January 2013 to the date of the business
combination are those of the “Combined Group” as the Company did not trade prior to the
transaction; and
c) comparative numbers presented in the interim condensed consolidated financial statements relating to
the three month period ended and as at 31 March 2013 are those of the “Combined Group”.
Significant accounting policies
The accounting policies adopted, methods of computation, critical accounting judgments, key sources of
estimation uncertainty and financial risk management objectives and policies are consistent with those
followed in the preparation of the Group’s annual consolidated financial statements for the year ended 31
December 2013, except for the adoption of new standards and interpretations effective as of 1 January
2014, which are detailed below. The application of these new standards and interpretations did not have a
material impact on the amounts reported for the current and prior periods.
Damac Real Estate Development Limited, DIFC
Dubai, U.A.E.
11
Notes to the interim condensed consolidated financial information
For the period ended 31 March 2014 (continued)
2.
Basis of preparation (continued)
Significant accounting policies (continued)
IAS 32
IAS 36
IAS 39
IFRS 10, IFRS 12 & IAS 27
Amendments to IAS 32 Financial Instruments: Presentation
Amendments to IAS 36 Impairment of Assets: Recoverable Amount
Disclosures
Amendments to IAS 39 Financial Instruments: Recognition and
Measurement, Novation of Derivatives and Continuation of Hedge
Accounting
Guidance on Investment Entities
The Group has not applied any of the new and revised IFRS that have been issued but are not yet
effective. The Group anticipates that these new standards will be adopted in the Group's consolidated
financial statements in the year of initial application and that the application of such standards may have
significant impact on amounts reported in respect of the Group's statements. However, it is not practicable
to provide a reasonable estimate of that effect until a detailed review has been completed.
The interim condensed consolidated financial information does not include all the information required
for full annual consolidated financial statements and should be read in conjunction with the Group’s
audited consolidated financial statements as at and for the year ended 31 December 2013. In addition,
results for the three-month period ended 31 March 2014 are not necessarily indicative of the results that
may be expected for the financial year ending 31 December 2014. The interim condensed consolidated
statement of comprehensive income for the three month period ended 31 March 2014 is not affected
significantly by seasonality of results.
3.
Segmental analysis
Information reported to the Board for the purpose of the resource allocation and assessment of performance is
primarily determined by the nature of the different activities that the Group engages in, rather than the
geographical location of these operations. The Group currently comprises a single reportable operating
segment, being property development.
Geographic information for the Group is split between operations in the UAE “Domestic” and operations in
other jurisdictions “International”.
1 January to
1 January to
31 March 2014 31 March 2013
(3 months)
(3 months)
(Unaudited)
(Unaudited)
US$ Million
US$ Million
Revenue
Domestic
International
Total revenue
435.8
------------------435.8
========
224.6
-----------------224.6
========
Damac Real Estate Development Limited, DIFC
Dubai, U.A.E.
12
Notes to the interim condensed consolidated financial information
For the period ended 31 March 2014 (continued)
3.
Segmental analysis (continued)
Development properties
Domestic
International
Total development properties
4.
31 March
2014
(unaudited)
31 December
2013
(Audited)
1,319.6
596.2
------------------1,915.8
========
1,358.1
574.6
-----------------1,932.7
========
31 March
2014
(Unaudited)
US$ Million
31 December
2013
(Audited)
US$ Million
Development properties
Balance at the beginning of the period / year
Additions
Transfer to cost of sales
Transfers from a related party
Impairment reversal
Balance at the end of the period / year
1,932.7
150.3
(167.2)
------------------------------1,915.8
=============
1,565.4
745.6
(434.8)
29.4
27.1
------------------------------1,932.7
=============
The development properties balance includes land plots for future development, properties under
development and completed units held in inventory. The balances above are split into these categories as
follows:
31 March
2014
(Unaudited)
US$ Million
Land held for future development
Properties under development
Completed properties
97.5
1,615.2
203.1
------------------------------1,915.8
=============
31 December
2013
(Audited)
US$ Million
83.8
1,650.4
198.5
------------------------------1,932.7
=============
Damac Real Estate Development Limited, DIFC
Dubai, U.A.E.
13
Notes to the interim condensed consolidated financial information
For the period ended 31 March 2014 (continued)
5.
Other financial assets
31 March
2014
(Unaudited)
US$ Million
Escrow retention accounts
Margin deposits
Other deposits
92.7
6.0
0.6
------------------------------99.3
=============
31 December
2013
(Audited)
US$ Million
72.8
4.9
0.2
------------------------------77.9
=============
In accordance with applicable laws, the Group holds funds under escrow in bank accounts managed by
approved agents. These funds must be held in these escrow accounts for a fixed period of one year after
completion of the relevant development properties, at which point they are released to the Group. These
funds carry interest at commercial rates.
At 31 March 2014, margin deposits are held by banks under lien against credit facilities issued to the
Group and carry interest at commercial rates.
6.
Trade and other receivables
31 March
2014
(Unaudited)
US$ Million
Trade receivables
Provision for doubtful debts
Advances and deposits
Prepayments and other receivables
428.3
(26.0)
------------------------------402.3
109.5
6.7
------------------------------518.5
=============
31 December
2013
(Audited)
US$ Million
329.8
(29.8)
------------------------------300.0
104.4
5.1
------------------------------409.5
=============
Trade receivables represent amounts due from customers at the point of handover. The outstanding
balance represents the total amount which is yet to be collected at the reporting date. Customers are
allowed 30 days from each invoice date to settle outstanding dues.
Concentration of credit risk is limited due to the customer base being large and unrelated.
Damac Real Estate Development Limited, DIFC
Dubai, U.A.E.
14
Notes to the interim condensed consolidated financial information
For the period ended 31 March 2014 (continued)
7.
Financial investments
During the period, the entire financial investments portfolio was disposed for a consideration of US$ 30.4
million. The resulting loss on disposal of US$ 0.3 million was recorded in profit or loss. The related
investment revaluation reserve of US$ 0.5 million was recycled through profit or loss.
8.
Cash and cash equivalents
31 March
2014
(Unaudited)
US$ Million
Cash on hand
Cash held in escrow
Bank balances
Fixed deposits
Less: Fixed deposits with an original maturity of greater than
three months
Cash and cash equivalents
31 December
2013
(Audited)
US$ Million
0.1
799.2
142.7
36.8
------------------------------978.8
5.7
497.7
42.3
32.5
------------------------------578.2
(36.8)
------------------------------942.0
=============
(32.5)
------------------------------545.7
=============
Cash held in escrow represents cash received from customers which is held in escrow bank accounts
managed by approved escrow agents. Use of this cash is restricted to the specific development properties
to which the cash receipts relate and, hence, considered as cash and cash equivalents.
9.
Share capital
31 March
2014
(Unaudited)
US$ Million
Authorised, issued and fully paid 650,000,000 shares of US$ 1 each
10.
650.0
=============
31 December
2013
(Audited)
US$ Million
650.0
=============
Group restructuring reserve
On 3 December 2013, the Company completed its GDR listing on London Stock Exchange and issued an
additional 649,950,000 shares at a par value of US$ 1 each. The group restructuring reserve arises on
consolidation under the pooling of interests method used for the group restructuring which took place on
3 December 2013. This represents the difference between the share capital of the “Combined Group” and
DAMAC Real Estate Development Limited, DIFC at the date of the group restructuring. This reserve is
not distributable.
Damac Real Estate Development Limited, DIFC
Dubai, U.A.E.
15
Notes to the interim condensed consolidated financial information
For the period ended 31 March 2014 (continued)
11.
Bank borrowings
31 March
2014
(Unaudited)
US$ Million
Bank loans
Overdrafts
128.1
22.0
------------------------------150.1
=============
31 December
2013
(Audited)
US$ Million
71.4
13.9
------------------------------85.3
=============
Banks loans
The Group has borrowings under various loan arrangements with a number of banks and financial
institutions. These institutions provide the Group with term loans and overdraft facilities.
The bank loans include the following:
Name of the borrowing entity
Facility 1
Facility 2
Facility 3
Facility 4
Facility 5
Facility 6
Damac Properties Development LLC
Damac Properties Development LLC
Damac Properties Development LLC
Damac Properties Development LLC
Damac Properties SAL Holding
Majara Investments Limited
31 March
2014
(Unaudited)
US$ Million
3.5
4.0
95.2
25.4
------------------------------128.1
=============
31 December
2013
(Audited)
US$ Million
3.7
6.2
20.1
25.3
16.1
------------------------------71.4
=============
Repayment profile
The repayment profile of bank borrowings is as follows:
31 March
2014
(Unaudited)
US$ Million
On demand or within one year
In the second year
In the third to fifth year inclusive
Less: Amount due for settlement within 12 months
Amount due for settlement after 12 months
134.1
13.1
2.9
------------------------------150.1
(134.1)
------------------------------16.0
=============
31 December
2013
(Audited)
US$ Million
59.6
23.5
2.2
------------------------------85.3
(59.6)
------------------------------25.7
=============
Damac Real Estate Development Limited, DIFC
Dubai, U.A.E.
16
Notes to the interim condensed consolidated financial information
For the period ended 31 March 2014 (continued)
11.
Bank borrowings (continued)
At 31 March 2014, bank borrowings carry interest rates based on EIBOR/DIBOR/LIBOR plus agreed
commercial margins.
Security arrangements
At 31 March 2014, bank facilities (including overdrafts) were secured by:
a. Personal guarantee
The Chief Executive Officer has provided personal security over borrowings totaling US$ 102.8 million.
b. Corporate guarantees of Group entities
Corporate guarantees for the borrowings from Facility 1, Facility 3 and Facility 4 are provided by the
borrowing entities in the Group. In certain instances additional corporate guarantees are provided by the
operational subsidiaries of the borrowing entities or by other entities not within the Group but under the
control of the Chief Executive Officer.
c. Mortgages over plots of land
Loans from Facility 1, Facility 3 and Facility 5 totaling US$ 32.9 million as of 31 March 2014 are secured
by plots of land. The carrying value of these plots of land totaled US$ 55.5 million as at 31 March 2014.
12.
Related party transactions
The Group enters into transactions with companies and entities that fall within the definition of a related
party as contained in IAS 24 Related Party Disclosures. Related parties comprise entities under common
ownership and/or common management and control, their partners and key management personnel.
Management decides on the terms and conditions of the transactions and services received/rendered
from/to related parties as well as on other charges. Pricing policies and terms of all transactions are
approved by the management.
At the reporting date, balances with related parties were as follows:
31 March
2014
(Unaudited)
US$ Million
Due to related parties
Balances due to the Chief Executive Officer
=============
31 December
2013
(Audited)
US$ Million
1.2
=============
Damac Real Estate Development Limited, DIFC
Dubai, U.A.E.
17
Notes to the interim condensed consolidated financial information
For the period ended 31 March 2014 (continued)
12.
Related party transactions (continued)
Remuneration of key-management personnel
The remuneration of the directors, who are the key management personnel of the Group, is set out below
in aggregate for each of the categories specified in IAS 24 Related Party Disclosures.
I January to
31 March 2014
3 months
(Unaudited)
US$ Million
Short term employee benefits
Termination benefits - EOSB
13.
0.6
0.1
------------------------------0.7
=============
0.5
0.1
------------------------------0.6
=============
Trade and other payables
31 March
2014
(Unaudited)
US$ Million
Advances from customers
Accruals
Other payables
Retentions payable
Deferred consideration for land payments
14.
1 January to
31 March 2013
3 months
(Unaudited)
US$ Million
1,859.6
138.8
214.4
104.3
184.7
------------------------------2,501.8
=============
31 December
2013
(Audited)
US$ Million
1,715.3
101.6
142.3
99.3
232.5
------------------------------2,291.0
=============
Revenue
1 January to
31 March 2014
3 months
(Unaudited)
US$ Million
Constructed apartments
Sale of land
262.4
173.4
------------------------------435.8
=============
1 January to
31 March 2013
3 months
(Unaudited)
US$ Million
224.6
------------------------------224.6
=============
Damac Real Estate Development Limited, DIFC
Dubai, U.A.E.
18
Notes to the interim condensed consolidated financial information
For the period ended 31 March 2014 (continued)
15.
Contingent liabilities
31 March
2014
(Unaudited)
US$ Million
Bank guarantees
113.3
=============
31 December
2013
(Audited)
US$ Million
79.8
=============
The Group has contingent liabilities in respect of bank guarantees issued in the normal course of business
from which it is anticipated that no material liabilities will arise as at the above dates.
16.
Commitments
Commitments for the acquisition of services for the development and construction of assets classified
under developments in progress:
31 March
2014
(Unaudited)
US$ Million
-
Contracted for
Committed but not contracted for
764.4
2,718.5
------------------------------3,482.9
=============
31 December
2013
(Audited)
US$ Million
846.5
2,728.2
------------------------------3,574.7
=============
Future instalments receivable from customers under contracts for sale of properties directly related to the
Group’s commitments for the development and construction of assets related to these future receivables
amounted to US$ 2.8 billion as of 31 March 2014 (31 December 2013: US$ 2.5 billion).
17.
Earnings per share
The calculation of the basic and diluted earnings per share is based on the following data:
1 January to
31 March 2014
3 months
(Unaudited)
US$ Million
Profit for the period (US$ million)
Number of ordinary shares (million)
Earnings per ordinary share - basic and diluted (US$)
209.6
650.0
------------------------------0.32
=============
1 January to
31 March 2013
3 months
(Unaudited)
US$ Million
N/A
N/A
------------------------------N/A
=============
There were no instruments or any other items which could cause an antidilutive effect on the earnings per
share calculation. The Group was restructured on 3 December 2013 and as the transaction falls outside the
scope of IFRS 3 Business Combinations, the pooling of interests method was applied and the interim
condensed consolidated financial information of the Group is presented as a continuation of the
‘‘Combined Group’’. If the share capital had been consistent in 2013, the comparable EPS would have
been US$ 0.18 per share.
Damac Real Estate Development Limited, DIFC
Dubai, U.A.E.
19
Notes to the interim condensed consolidated financial information
For the period ended 31 March 2014 (continued)
18.
Fair value of financial instruments
As at the period end date, the financial instruments of the Group are classified as at amortised cost. The
carrying value of the financial assets and financial liabilities also approximate to their fair value. The
entire portfolio of financial investments was classified as level 1. After the disposal of the financial
investments (Note 7), the Group does not have any financial investments being classified at fair value.
19.
First time interim condensed consolidated financial information
This is the first interim condensed consolidated financial information presented by the Group.
20.
Approval of the interim condensed consolidated financial information
The interim condensed consolidated financial information for the period ended 31 March 2014 was
approved by the Board and authorised for issue on 12 May 2014.
21.
Subsequent event
On 9 April 2014, the Group issued US$ 650 million SUKUK TRUST CERTIFICATES (the
“Certificates”) maturing in 2019. Alpha Star Holding Limited is the Issuer with the Company as
Guarantor. The Certificates are listed on the Irish Stock Exchange and NASDAQ Dubai. The Certificates
confer on the holders of the Certificates from time to time (the ‘‘Certificateholders’’) the right to receive
certain payments arising from an undivided ownership interest in the assets of a trust declared by the
Trustee pursuant to the Declaration of Trust (the ‘‘Trust’’) over the Trust Assets (as defined in the
Prospectus) and the Trustee will hold such Trust Assets upon trust absolutely for the Certificateholders
pro rata according to the face amount of Certificates held by each Certificateholder in accordance with the
Declaration of Trust and the terms and conditions of the Certificates.