Building profit

WSE-listed Dom Development posted solid financial results for the first quarter of the year. The company's revenues rose nine percent y/y to zł.187.5 million, while net profit jumped 21 percent to zł.45.4 million. The higher numbers came despite slower sales, as the company managed to raise its sales margins.

"We are very pleased with the first quarter," said Jarosław Szanajca, president of Dom Development.

The developer delivered 674 apartments in the first quarter, giving it a 21-percent share of the Warsaw market. The sales figures sent mixed signals, however. The company sold just 328 apartments compared to last year's 478.

The lower number of apartments sold could be a reflection of the cooling residential market in Warsaw. According to the Central Statistical Office, the supply of apartments from developers and housing associations in March 2008 was 84 percent higher than the year before. The rise of supply has not yet been reflected in a significant price drop, which leaves buyers hesitant and prone to postpone their decision until the market outlook clears up.  

"Clients are more selective and reasonable in choosing their flats. Moreover, the market is filled with apartments purchased a year ago for investment purposes," added Szanajca. 

Nevertheless, company officials remain optimistic. The company is currently developing 2,800 apartments of an estimated value of zł.1.7 billion.