Earnings Report
Union Coop
1. Company Overview & Earnings Context
Union Coop is a Dubai-based cooperative society established in 1982 and listed on the Dubai Financial Market in July 2022. Its principal business activity is establishing and managing hypermarkets across the UAE.
The company operates through three major business segments:
Retail: Sale of consumer goods through supermarkets and hypermarkets.
E-commerce: Online shopping platforms and digital sales.
Real Estate: Rental income generated from shopping centres and properties.
During the first nine months of 2026, Union Coop delivered improved financial performance, supported by higher retail sales, strong e-commerce growth, increased other income and improved profitability.
The company reported revenue from sale of goods of AED 1.65 billion, while total income from operating activities reached AED 1.86 billion. Net profit increased to AED 243.33 million, compared with AED 226.85 million in the corresponding period of 2025.
The results indicate continued business growth, with e-commerce and real estate contributing positively alongside the core retail business.
2. Financial Performance Snapshot
Key Financial Metrics – 9M 2026 vs 9M 2025
Profitability and operating metrics
Gross profit: AED 518.75 million, compared with AED 506.31 million, an increase of approximately 2.5%.
Gross profit margin: 31.4%, compared with 33.6%.
Net profit margin on sales: 14.7%, compared with 15.0%.
Finance costs declined to AED 16.49 million from AED 21.04 million.
Marketing expenses declined to AED 24.83 million from AED 32.61 million.
Income tax expense increased to AED 25.29 million from AED 23.94 million.
Underlying Performance:
Union Coop recorded healthy revenue growth of 9.4%, supported by higher sales across its retail and e-commerce operations. However, the cost of goods sold increased by approximately 13%, faster than revenue growth, resulting in gross margin compression.
Despite this pressure, the company improved its net profit by 7.3%. Higher other income, lower finance costs and reduced marketing expenses helped support overall profitability.
Other income more than doubled to AED 34.31 million, providing an additional boost to earnings. The company also benefited from a gain on disposal of land, which contributed to the improvement in other income.
Overall, the company maintained positive earnings momentum, although the decline in gross margin indicates some pressure on underlying retail profitability.
3. Operating Performance & Major Programs
Union Coop operates through three business segments: Retail, E-commerce and Real Estate. All reported revenue is generated within the UAE.
A. Retail Segment
Revenue increased to AED 1,475.72 million from AED 1,383.64 million, representing growth of approximately 6.7%.
Retail remains the company's largest business segment, contributing approximately 89.4% of total sales.
Profit before tax and community responsibility expenses increased to AED 176.23 million from AED 170.99 million.
Retail growth was supported by higher sales of goods, although increased cost of goods sold affected gross profitability.
B. E-commerce Segment
Revenue increased to AED 174.61 million from AED 124.21 million, representing strong growth of approximately 40.6%.
E-commerce contributed approximately 10.6% of total sales.
Segment profit before tax and community responsibility expenses increased to AED 20.64 million from AED 10.63 million.
The segment continued to demonstrate strong growth, indicating increasing customer adoption of online shopping platforms.
C. Real Estate Segment
Income from other operating activities increased to AED 148.40 million from AED 134.92 million, representing growth of approximately 10%.
Profit before tax and community responsibility expenses increased to AED 78.37 million from AED 76.82 million.
The real estate segment continues to provide recurring rental income and support earnings diversification.
D. Property Portfolio and Asset Management
Property and equipment stood at AED 1.88 billion as of September 2026.
Investment properties amounted to AED 520.75 million.
During the period, Union Coop disposed of land with a carrying value of AED 78.33 million for net consideration of AED 99.99 million.
The disposal generated a gain of AED 21.66 million, contributing positively to other income.
Capital expenditure during the nine-month period amounted to AED 24.16 million, compared with AED 80.25 million in the previous corresponding period.
Operating Performance Assessment:
The strongest growth came from e-commerce, which recorded a 40.6% increase in revenue and almost doubled its segment profit. Retail continued to provide the majority of sales, while real estate generated stable recurring income.
The combination of retail scale, expanding online operations and rental income provides Union Coop with a diversified operating structure.
4. Key Performance Drivers
1. Strong Retail Sales Growth
Retail revenue increased by 6.7%, demonstrating continued demand across the company's hypermarket operations. Retail remains the primary contributor to overall revenue.
2. Rapid E-commerce Expansion
E-commerce revenue grew by approximately 40.6%, making it the fastest-growing business segment. Its contribution to overall profitability also improved significantly.
3. Higher Other Income
Other income increased to AED 34.31 million from AED 14.86 million. A significant contributor was the AED 21.66 million gain from the disposal of land.
4. Lower Finance Costs
Finance costs declined by approximately 21.7% to AED 16.49 million from AED 21.04 million. This helped support profit growth.
5. Improved Cost Management
Marketing expenses declined by approximately 23.9%, while staff costs remained relatively stable at AED 167.25 million.
6. Stable Real Estate Contribution
Real estate income increased by approximately 10%, supporting earnings stability through recurring rental activities.
7. Gross Margin Pressure
Cost of goods sold increased faster than sales revenue, resulting in gross margin declining from approximately 33.6% to 31.4%. This remains an important factor to monitor in subsequent reporting periods.
5. Balance Sheet, Backlog & Cash Flow
Balance Sheet Position – September 2026 vs December 2025
Key Balance Sheet Observations
Total assets declined by approximately 2.5% to AED 3.55 billion.
Total equity remained strong at AED 2.58 billion.
Total liabilities declined by approximately 4.8% to AED 968.45 million.
Bank balances and cash increased to AED 229.26 million.
Inventories increased to AED 370.48 million, reflecting higher inventory holdings.
Total lease liabilities declined to AED 482.91 million from AED 558.04 million.
The company maintained a strong equity base, with equity representing approximately 72.7% of total assets.
Liquidity and Financial Position
Union Coop maintained a reasonably comfortable liquidity position.
Current assets: AED 686.62 million.
Current liabilities: AED 464.06 million.
Current ratio: approximately 1.48x.
Cash and bank balances: AED 229.26 million.
Cash and cash equivalents reported in the cash flow statement: AED 109.26 million.
The difference between bank balances and cash and cash equivalents reflects AED 120 million placed in deposits with maturities exceeding three months. These deposits carry a fixed profit rate of 5.8%.
Cash Flow Performance – 9M 2026 vs 9M 2025
Cash Flow Analysis
Operating cash flow increased by approximately 9.7% to AED 311.73 million, indicating healthy cash generation from core operations.
Investing activities recorded a net outflow of AED 35.81 million, mainly reflecting the AED 120 million increase in term deposits with maturities exceeding three months, alongside capital expenditure and proceeds from asset disposals.
Financing activities recorded an outflow of AED 322.27 million, primarily due to dividend payments of AED 281.19 million and lease-related payments.
Closing cash and cash equivalents declined to AED 109.26 million from AED 155.61 million at the beginning of the year.
Dividends and Shareholder Returns
During the General Assembly meeting held on 7 April 2026, shareholders approved total dividends and returns on members' dealings amounting to AED 281.19 million.
This comprised:
Cash dividend of AED 244.38 million, equivalent to 14% of existing share capital.
Returns on members' dealings of AED 36.81 million, equivalent to 5% of members' purchases during 2025.
The full amount was paid during the nine-month period.
Backlog and Commitments
As Union Coop is primarily a retail, e-commerce and real estate business, the financial statements do not report a conventional order backlog.
Capital commitments: AED 1.35 million.
Letters of guarantee: AED 1.95 million.
These commitments indicate relatively limited disclosed capital obligations at the reporting date.
6. Investor Takeaway
Union Coop delivered a positive financial performance during the first nine months of 2026, supported by healthy retail growth, strong e-commerce expansion and stable real estate income.
Positive Factors
Revenue increased by 9.4%, reflecting continued business expansion.
Net profit increased by 7.3% to AED 243.33 million.
E-commerce revenue grew by approximately 40.6%, highlighting strong digital business momentum.
Operating cash flow improved to AED 311.73 million.
Finance costs declined by approximately 21.7%.
Total liabilities decreased, while cash and bank balances increased.
Real estate operations continued to provide recurring income.
Key Risks and Areas to Monitor
Gross profit margin declined from 33.6% to 31.4%, indicating pressure on merchandise profitability.
Cost of goods sold increased faster than revenue.
Cash and cash equivalents declined compared with the beginning of the year, partly due to dividends and investment in longer-maturity deposits.
Other income benefited from a non-recurring AED 21.66 million land disposal gain. Future earnings should also be assessed excluding this contribution.
Continued inventory growth and retail operating costs require monitoring.
Accounting and Auditor Context
The financial statements were reviewed by Ernst & Young Middle East (Dubai Branch).
EY issued a review conclusion stating that nothing had come to its attention indicating that the interim financial statements were not prepared, in all material respects, in accordance with IAS 34 as modified by UAE MOET clarification T.M/15/2026.
This was a limited review, not a full statutory audit.
EY highlighted non-compliance with certain provisions relating to the percentage of dividends declared under Cabinet Resolution No. 55 of 2024 and the Articles of Association. Management had obtained consent from the Department of Economy and Tourism on 26 February 2026 to declare dividends using these percentages.
The financial statements follow the UAE-specific accounting clarification concerning the presentation of returns on members' dealings within the statement of changes in equity rather than the statement of profit or loss.
Union Coop fiancial.pdf
Overall Investor View
Union Coop's 9M 2026 performance reflects a fundamentally profitable and cash-generative retail business. Revenue and net profit continued to grow, while the expansion of e-commerce provides an additional long-term growth opportunity.
The company's strong equity position, declining lease liabilities and healthy operating cash generation are positive financial indicators.
