DAMAC is feeling the impact of a real estate market in Dubai that is under pressure because of lower property prices and subdued sales as new developments hit the market.
"In a cyclical market it's important to have some sense of certainty over direction, and from that perspective, we're satisfied," Adil Taqi said in a phone interview on Tuesday after the publication of DAMAC's results for the first half of 2018.
"We're also satisfied in a way that every day in a weak cycle that we put behind us puts us closer to the turnout."
Taqi said the firm was "holding its nerve" in terms of cash balances and payment plans.
DAMAC's second quarter profit from continuing operations fell by around 46 percent year-on-year to 378.2 million dirhams ($103 million). Total revenues for the first six months stood at 3.7 billion dirhams, year-on-year growth of 5 percent.
Dubai's real estate prices, hit by new supply, could decline by 10 to 15 percent over the next two years, after falling between 5 to 10 percent in 2017, according to S&P estimates earlier this year.
DAMAC has not pulled or delayed any existing projects, and 2018 is likely to be a bumper year in terms of property deliveries, the CFO said.
In the first half of the year, DAMAC delivered 1,490 units compared to 1,071 units in the same period last year. The company plans to deliver over 4,000 units in 2018.
DAMAC's unsold inventory, which extends beyond Dubai, is about $400-$500 million, said Taqi. "In the short term, unless the market improves, this will build up slightly more."
But the firm does not plan to sell assets to counterbalance the market slowdown. "We will not throw value away because we're under pressure. We recognize we're in a tough market and we need to be able to manage that."
DAMAC has no significant capital expenditure commitment for the rest of the year, and currently has $2 billion in cash, of which $350-400 million is unrestricted, or not earmarked for a specific purpose.
"We're well capitalized, I don't see any question over our cash ability," said Taqi.
DAMAC has $270 million in Islamic bonds due early next year and plans to pay them down, rather than approaching the market to refinance them. It has around $180 million in bank debt that it mostly plans to refinance in the near-term, also to maintain relationships with local banks, he added.
($1 = 3.6728 UAE dirham)
(Reporting by Davide Barbuscia; Editing by Keith Weir)
By Davide Barbuscia