Abu Dhabi, (Business News Report)|| The Emirati Emaar Developments Company said that it will not distribute profits for the year 2021, and it will use it to pay off debts and improve the capital structure.
Emaar Developments clarified that based on the company’s board of directors’ recommendation, the retained earnings will be to meet the land acquisition payments and create long-term shareholder value.
In a report, the company said that the trend towards retained earnings is subject to the approval of shareholders at the company’s next annual general meeting.
The report also indicated that the balance of distributable profits after allocating the share of the legal reserve will be transferred to retained earnings.
The total equity attributable to the owners of the company, as on December 31, 2021, amounted to 14.49 billion dirhams, the report said.
According to the financial report, the balance of retained earnings rose to 9.3 billion dirhams at the end of 2021, compared to 6.4 billion dirhams at the end of 2020.
Retained earnings are defined as the amount of net profits that companies, in general, decide not to distribute to shareholders or partners. Rather, it retains it, recycles it, invests it in the project, increases its capital, or distributes it to investors at a later stage, or to pay off outstanding debts.
Companies usually retain profits in case they wish to expand or invest, and therefore they can use the retained earnings to finance their financial needs. Retained earnings are considered an internal source of financing and not an external source.
Emaar Developments held its annual general assembly meeting, where the members of the Board of Directors discussed the outstanding performance achieved by the company during the year 2021, which it succeeded in achieving through the strict measures adopted by the company.
During the meeting, the members of the Board of Directors affirmed the company’s perseverance in the completion of high-level real estate projects for clients and residents alike, while ensuring that the deadlines are adhered to within the established time frames.
During the meeting, the Board of Directors’ report for the year 2021 on the company’s activity and financial position and the auditor’s report was approved.
The proposal of the company’s board of directors not to distribute dividends to shareholders was approved.
Emaar Developments also expects to deliver nearly 8,500 housing units during 2022, an 80% increase over the previous year, in addition to 24,500 housing units currently under construction across various major urban projects in Downtown Dubai, Dubai Creek, Emaar South, and Emaar Beachfront and others.
The company delivered more than 4,700 housing units in 2021 in prime locations in Dubai.