Dar Global swings to net loss as revenue more than halves

Dar Global reported a first-half net loss of $12.8m on Thursday, contrasting sharply with a profit of $20.8m during the same period last year.

The London-listed international luxury real estate developer saw a substantial drop in revenue to $44.5m for the six months ended 30 June, compared to $108.4m in the first half of 2023, amid a period of significant portfolio expansion and strategic investments.

Despite the decline in earnings, Dar Global said it strengthened its portfolio, which now included 14 active projects with a gross development value (GDV) of $6.8bn, up from 12 projects valued at $5.9bn as of last December.

The company reported robust demand for its new and existing projects, with contracted sales reaching 1,797 units by the end of June, representing a total sales value of about $1.3bn.

Its balance sheet remained strong, with cash reserves of $335.5m, including $126.9m in free cash and $208.6m in restricted escrow accounts.

Net asset value stood at $451.9m at the end of June, slightly down from $465.4m at the close of 2023.

With total available liquidity of around $170.4m, Dar Global said it was well-positioned to capitalise on growth opportunities.

During the period, Dar Global launched several high-profile projects.

In partnership with Aston Martin, the company introduced luxury beachfront residences on Al Marjan Island in the UAE, marking Aston Martin's entry into the GCC market.

It also announced the Astera, a beachfront development featuring interiors by Aston Martin, expected to be completed by December 2028.

The company further expanded its portfolio with the Trump International Hotel in Oman and plans for the first Dolce & Gabbana resort globally, located in the Maldives.

Additionally, Dar Global acquired land for residential villas at Jumeirah Golf Estate in Dubai, adding $310m to its gross development value, and revealed plans for new Trump Towers in Jeddah and Dubai.

Post-period, Dar Global secured up to $275m in growth capital to fund new projects across its targeted markets.

The company said it had appointed Rothschild & Co to explore further opportunities in London and Saudi Arabia as part of its strategic growth plan.

“We have had a promising start to the year as Dar Global continued to deliver luxury real estate developments for our affluent clientele across the globe,” said chief executive officer Ziad El Chaar.

“Demand for our newly-launched and existing products has remained strong with cumulative sales totalling nearly $1.3bn.

“Overall, as expected, revenue and profitability for the first half of this year were subdued as some of our early stage developments approach revenue recognition milestones.”

El Chaar said that as the milestones were met we expect the second half of 2024 and full year 2025 to be positively impacted as a result.

“We are pleased to therefore reiterate our target of delivering at least $700m of revenue in aggregate across 2024 and 2025 whilst maintaining a similar sales rate and overall EBITDA margin to what was delivered in 2023.

“Our current revenue expectation for 2024, as we approach these milestones, is in the range of $210m and $250m.

“As we look ahead, the business is in a robust financial position to execute on its expansion strategy.”

Reporting by Josh White for Sharecast.com.