Deyaar Development

1. Company Overview & Earnings Context

Deyaar Development P.J.S.C. is a Dubai-based real estate company listed on the Dubai Financial Market under the ticker DEYAAR. The Group’s principal activities include property development and investment, leasing, property and facilities management, and hospitality-related activities. Dubai Islamic Bank is the Group’s ultimate controlling shareholder. 

For the nine months ended 30 September 2026, Deyaar delivered a strong earnings performance. Revenue increased 5.2% YoY to AED 1.52 billion, while profit before tax rose 27.2% to AED 541.5 million. Net profit after tax reached AED 478.8 million, up 17.8% YoY, despite a significant increase in income-tax expense.

Q3 also maintained positive momentum, with revenue increasing 9.3% YoY to AED 570.3 million and net profit after tax rising 14.3% to AED 180.5 million.

2. Financial Performance Snapshot

• Revenue: AED 1.523 Billion (+5.2% YoY)

• Direct Costs: AED 991.44 Million (-1.2% YoY)

• Gross Profit: AED 531.43 Million (+19.8% YoY)

• Gross Margin: ~34.9% vs. ~30.7%

• G&A and Selling Expenses: AED 129.42 Million (-11.5% YoY)

• Other Income: AED 57.94 Million (+52.2% YoY)

• Finance Income: AED 43.72 Million (+64.3% YoY)

• Finance Costs: AED 28.93 Million (+5.3% YoY)

• Share of Results from JV & Associate: AED 70.24 Million vs. AED 83.88 Million

• Net Fair-Value Loss: AED 3.53 Million vs. AED 7.41 Million Gain

• Profit Before Tax: AED 541.45 Million (+27.2% YoY)

• Net Profit After Tax: AED 478.79 Million (+17.8% YoY)

• Profit Attributable to Owners: AED 445.72 Million (+9.1% YoY)

• Basic & Diluted EPS: 10.19 fils vs. 9.33 fils

Underlying operating performance was particularly strong. Revenue increased by approximately AED 75.8 million while direct costs actually declined, resulting in gross profit growth of nearly 20% and gross-margin expansion of more than four percentage points.

The difference between the 27.2% growth in pre-tax profit and 17.8% growth in after-tax profit was largely attributable to higher taxation. Income-tax expense increased to AED 62.67 million from AED 19.34 million.

3. Operating Performance & Major Programs

Deyaar operates through three principal segments: Property Development, Properties & Facilities Management, and Hospitality. Property development remained overwhelmingly the largest earnings contributor. 

Property Development generated revenue of AED 1.325 billion, up 7.2% from AED 1.236 billion. Segment profit increased substantially to AED 444.99 million from AED 372.16 million, representing growth of approximately 19.6%.

Within this segment, revenue from property sales increased to AED 1.281 billion from AED 1.196 billion, while leasing income rose to AED 43.70 million from AED 40.17 million.

Properties & Facilities Management generated AED 137.80 million of revenue versus AED 135.00 million, with segment profit improving to AED 19.88 million from AED 14.81 million. Property-management revenue itself increased strongly to AED 25.30 million from AED 16.72 million, partly offset by lower facilities-management revenue.

Hospitality revenue declined to AED 60.39 million from AED 75.87 million, while segment profit fell to AED 13.92 million from AED 19.43 million. Despite weaker nine-month figures, Q3 hospitality revenue increased slightly YoY to AED 17.68 million.

Deyaar had AED 1.34 billion of project-related contractual commitments at September 2026, compared with AED 1.28 billion at December 2025, reflecting continuing development activity.

4. Key Performance Drivers

The main earnings driver was improved economics in the core property-development business. Revenue from property sales increased approximately 7.1% to AED 1.281 billion, while the corresponding cost of properties sold increased only marginally to AED 887.33 million from AED 884.25 million. 

Cost discipline provided another important boost. G&A and selling expenses declined 11.5% to AED 129.4 million, despite higher Group revenue. Other income increased 52.2% to AED 57.9 million and finance income rose 64.3% to AED 43.7 million.

These positives were partly offset by weaker contributions from the joint venture and associate, which declined to AED 70.2 million from AED 83.9 million, and by a AED 3.5 million net fair-value loss compared with a AED 7.4 million gain in 9M 2025.

A notable accounting development concerned Deyaar's 22.72% interest in Solidere International Al Zorah Equity Investments Inc. Effective 1 May 2026, Deyaar determined that it no longer exercised significant influence over Al Zorah and discontinued equity-method accounting. The retained interest was reclassified as an FVOCI financial asset.

Re-measurement generated a AED 7.59 million gain in profit or loss, but the subsequent reduction in the investment's fair value resulted in a AED 19.87 million loss through OCI. The investment was valued at AED 486.41 million at September 2026.

Taxation was another significant factor. Deyaar's effective tax rate increased to 11.5% from 4.5%, partly reflecting the UAE Domestic Minimum Top-up Tax. Total tax expense reached AED 62.67 million, including AED 30.69 million of top-up tax expense.

5. Balance Sheet, Backlog & Cash Flow

• Total Assets: AED 8.05 Billion

• Total Equity: AED 5.91 Billion

• Total Liabilities: AED 2.14 Billion

• Cash & Bank Balances: AED 2.97 Billion

• Cash & Cash Equivalents: AED 1.91 Billion

• Investment Properties: AED 953.08 Million

• Trade, Contract & Other Receivables: AED 1.58 Billion

• FVOCI Equity Investments: AED 501.92 Million

• Islamic Finance Borrowings: AED 336.89 Million

• Net Operating Cash Flow: AED 483.60 Million

• Project-Related Commitments: AED 1.34 Billion

• Dividend Paid: AED 218.79 Million

The balance sheet remained strong. Total assets were approximately AED 8.05 billion, broadly stable compared with AED 8.03 billion at December 2025, while total equity increased to AED 5.91 billion from AED 5.67 billion. 

Liquidity was substantial. Cash and bank balances increased to AED 2.97 billion from AED 2.21 billion, although AED 1.05 billion represented term deposits with original maturities exceeding three months. Cash and cash equivalents therefore stood at AED 1.91 billion. Approximately AED 1.64 billion of bank balances were held in project escrow accounts. 

Borrowings declined 16.6% to AED 336.89 million from AED 403.84 million. During the period, Deyaar drew AED 146.62 million of borrowings while repaying AED 213.57 million. The Group also had another AED 354 million of available facilities for future drawdown. 

Operating cash generation remained healthy at AED 483.6 million, compared with AED 468.2 million in 9M 2025. Investing activities consumed AED 341.8 million, principally because of increased term deposits, partly offset by AED 492.5 million repayment of contributed capital from a joint venture and AED 80 million of dividends received from a JV and associate.

Financing cash outflow was AED 330.0 million, including AED 218.8 million of dividends and net borrowing repayments. Cash and cash equivalents consequently declined from AED 2.10 billion at the beginning of the year to AED 1.91 billion. 

For a property developer, project commitments provide useful visibility into ongoing activity rather than a conventional industrial backlog. Deyaar reported AED 1.3385 billion of project-related contractual commitments, up from AED 1.2849 billion at December 2025. 

6. Investor Takeaway

Deyaar's 9M 2026 results show stronger underlying profitability than the headline 5.2% revenue growth alone suggests. Revenue reached AED 1.52 billion, but gross profit increased nearly 20%, pre-tax profit rose 27.2%, and net profit increased 17.8% to AED 478.8 million.

The core property-development segment remains the main earnings engine, with segment profit increasing approximately 19.6% to AED 445 million. Property sales were stronger, direct costs were well controlled, and G&A expenses declined, producing meaningful operating leverage.

The balance sheet also remains a major strength. Deyaar had AED 2.97 billion of cash and bank balances against only AED 336.9 million of borrowings, while operating activities generated AED 483.6 million of cash. Borrowings declined during the period and AED 354 million of additional financing facilities remained available.

There are nevertheless several items worth monitoring. Hospitality performance remained weaker YoY, JV/associate earnings declined, investment-property valuations produced an AED 11.1 million loss, and the Al Zorah reclassification introduced greater exposure to fair-value movements through OCI. In addition, the effective tax rate increased materially following implementation of the UAE Domestic Minimum Top-up Tax.

Regional geopolitical developments remain a consideration for both property development and hospitality. Management assessed the potential impact on cash flows and property valuations but concluded that there was no significant impact as of 30 September 2026. 

Going forward, the key areas to monitor are property-sales execution, gross-margin sustainability, project completions, the AED 1.34 billion development commitment pipeline, customer advances, hospitality recovery, Al Zorah valuation movements, cash conversion, borrowing levels and the impact of the higher tax burden.

KPMG issued an unmodified review conclusion, stating that nothing had come to its attention indicating that Deyaar's interim condensed consolidated financial statements were not prepared, in all material respects, in accordance with IAS 34.