Dar Al Arkan Q2 earnings drop 30pc
Riyadh, July 21, 2010
Saudi-based real estate developer Dar Al Arkan said second-quarter earnings fell by almost 30 per cent on declining sales of building-ready land, its main revenue source.
Second-quarter net profit was broadly in line with analysts forecasts at SR437 million ($117 million), down 29.3 per cent from SR618.3 million a year earlier, Saudi Arabia's largest property developer by market value said in a statement.
Analysts surveyed by Reuters had expected on average net profit of SR431 million, according to a statement in our sister newspaper the Gulf Daily News.
'The decline in second-quarter net profit is due to a decrease in the areas of sold land,' the company said.
Land sales generate the bulk of revenues and profit for the firm: They accounted for 90 per cent of its revenues during the first quarter and 96 per cent of its gross profit for the period.
The repercussions of the financial crisis have led to a drop in the amount of liquidity that goes into land speculation in Saudi Arabia, resulting mainly in a decline in the volume of transactions, sources say. – TradeArabia News Service