Emaar Properties, the global developer of iconic projects, reported today a net operating profit of Dh1.22 billion ($332 million) for the first six months of 2012, 45 per cent more than the half year 2011 net operating profit of Dh843 million ($230 million).
The company’s net operating profit for the second quarter of 2012 was Dh614 million ($167 million), an increase of 45 per cent over the second quarter 2011 net operating profit of Dh422 million ($115 million).
This beat the forecasts of three analysts polled by Reuters, who on average had expected Emaar would make a net profit of Dh516.33 million.
Revenue for the quarter was Dh2.1 billion compared to Dh2.03 billion in the second quarter of 2011.
Emaar, which saw its sales of apartments plunge 85 per cent last year, is gradually shifting its focus from the Dubai property market towards the more profitable hospitality and retail sectors. It owns the Dubai Mall, billed as the world's largest, and operates Armani-branded hotels.
Its rental, retail and hospitality business contributed more than half of Emaar's six-month revenue, the company said. Revenue from its retail business was Dh1.3 billion in the first half of 2012, up 23 per cent from a year earlier.
Mohamed Alabbar, chairman, Emaar Properties, said: “The real estate market in Dubai is turning around, led by the robust performance of key growth sectors including aviation, retail, hospitality, tourism and foreign trade.
“The city’s appeal to high net worth individuals as the ideal destination for a home is also gaining strength. Emaar’s financial results for the first half of the year reflects the growing strength of Dubai’s economy.
“To add long-term value to our stakeholders, we are planning on bigger growth in our home market through projects such as the Dubai Modern Art Museum & Opera House District, and the expansion of The Dubai Mall, in addition to new project launches,” he added.
'The bottom line for the quarter came in stronger than our forecasts and consensus expectations which, in our view, is likely to support Emaar's share performance in the short term,' said Jan Pawel Hasman, vice president for equity research at investment bank EFG Hermes.
Emaar plans to focus on boosting revenues from its global operations and enhancing profit from recurring revenues, its chief executive Mohammed Alabbar said earlier this year.
Dubai's property market is slowly stabilising after home prices slumped by over 60 per cent from their peak in 2008. Foreign investors bought real estate assets worth Dh28.3 billion in the first half of 2012 compared to Dh20.8 billion a year earlier, data released by Dubai's land department at the weekend showed.
Emaar drew strong demand when it issued a $500 million seven-year Islamic bond, or sukuk this month, a sign that investor confidence in Dubai is returning as state-owned firms repay their debts.
International operations of Emaar accounted for approximately 11 per cent of half-year revenues, as the company delivered units in Turkey, Egypt, Saudi Arabia and Lebanon.
Emaar has handed over more than 34,000 units since 2001. The developer said it would continue to explore new growth opportunities in India, Saudi Arabia, Morocco, Pakistan, Syria, Turkey, Egypt and Jordan.
Shares of the firm ended 0.3 per cent lower on the Dubai market prior to the announcement of the earnings. – Reuters & TradeArabia News Service