Emaar Properties Q4 profits plunge 28pc
Dubai, January 31, 2013
Emaar Properties, Dubai's largest developer, posted a 28 percent drop in fourth-quarter net profit on Thursday, missing analysts' forecasts, as costs soared amid revival of stalled projects in the emirate.
The builder of the world's tallest tower, the Burj Khalifa, reported a quarterly profit of 512 million dirhams ($139.39 million) compared with a profit of 716.7 million dirhams in the prior-year period.
A Reuters poll of five analysts estimated an average net profit of 546.25 million dirhams for the quarter.
A gradual recovery in Dubai's property market - buoyed by return of speculative buyers - has helped Emaar revisit some of its projects which was put on hold after the emirate's property crisis in 2009, and renew its international growth plans.
Its shares have benefited from the revival of the emirate's battered property market, gaining 30 percent year-to-date and nearly doubling in the last one year.
"Emaar capitalised on the city's resurgence by investing in creating prime real estate assets and strengthening our shopping malls and hospitality businesses," said Mohamed Alabbar, the chairman of Emaar Properties.
Alabbar said that the company’s growth outlook for 2013 integrates with its ongoing commitment to support the socioeconomic growth of the countries it operates in, by developing integrated communities that help energise the local economy.
“We have made several significant additions to our property portfolio including the Dubai Modern Art Museum & Opera House District in Downtown Dubai, the 1 million sq ft expansion to The Dubai Mall, the extension to Arabian Ranches, new properties in our Address hotels portfolio, and our partnership with Mohammed Bin Rashid City,” he added.
“Our focus on adding value for our stakeholders and creating self-sustaining business entities that contribute to the recurring revenue streams of the company will remain a constant.”
Revenue for the quarter was 2.7 billion dirhams, a 20 percent increase over 2.2 billion dirhams during the same period in 2011, Emaar said in a bourse statement.
Cost of revenues soared to 1.5 billion dirhams for the quarter compared with 970 million dirhams in the prior-year period.
Emaar’s shopping malls & retail and hospitality & leisure businesses contributed 4.096 billion dirhams to the full-year revenue, representing 50 per cent of the total. The contribution of Emaar’s international operations to the total revenue was 1.264 billion dirhams, representing 15 per cent of the total revenue.
International revenues were reinforced by the handover of homes and offices in Turkey, Lebanon, Saudi Arabia, Egypt and Pakistan, among other markets.
The developer handed over 1,105 homes and more than 149,000 sq ft of commercial office space in Dubai in 2012, it said. The Company also handed over 673 homes and more than 122,000 sq ft of commercial space in its international markets.
The company signed a $500 million loan in December to finance its Emaar Square project in Turkey.
Emaar's latest offering, serviced residences in Downtown Dubai, was sold out one the first day of its public launch, the developer said in a statement following the event last week.
The company said more than 80 percent of its projects launched last year have been sold.
Shares of Emaar ended 0.2 percent lower on Dubai's bourse prior to the release of the results. – Reuters & TradeArabia News Service