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Emaar reports 45 per cent profit drop.

DUBAI: Emaar Properties, the builder of the world's tallest tower in Dubai, reported a 45 per cent decline in first-quarter profit, missing analyst estimates, as it delivered fewer units in Burj Khalifa.

Net income fell to Dh421 million ($115 million), or seven fils a share, from Dh761 million, or 12 fils share in the year-earlier period, the company said in an e-mailed statement yesterday.

The average estimate of six analysts in a Bloomberg survey was for a profit of Dh567 million.

Emaar, the United Arab Emirates' biggest developer, said profit was driven by its hotels and malls as well as the handover of about 270 apartments in Burj Khalifa and Boulevard Plaza.

That compares with 1,300 in the corresponding quarter in 2010. The developer, which generates most of its revenue from Dubai, was hurt by a slump in property prices in its home market of more than 60 per cent as speculative demand waned and banks tightened lending since mid-2008.

"Deliveries in Dubai are now winding down and Emaar is relying on foreign operations to plug the gap," Alembic HC Securities analyst Majed Azzam said yesterday. "However, prices there are lower and margins are tighter."

The company said it delivered commercial space in Syria's Eighth Gate development. Emaar's hotels had an 87 per cent average occupancy rate during the first quarter, according to the statement.

The developer's revenue in the quarter amounted to Dh1.98 billion and the operating profit margin improved to 28.5 per cent in the quarter from 26 per cent a year ago.

"Emaar will continue to explore growth opportunities in key emerging markets where our emphasis will be to create dynamic socio-economic growth engines like Downtown Dubai that create jobs, supports ancillary industries and meet lifestyle aspirations," Chairman Mohammed Alabbar said in the statement.

Emaar said loss from associated companies widened to Dh127 million from Dh57 million in the year-ago period without naming the units.

Emaar owns a 45 per cent stake in Islamic mortgage lender Amlak Finance, which was barred from trading in November 2008 after the global financial crisis cut their access to funding.

Muscat Press and Publishing House SAOC 2011

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Publication:Times of Oman (Muscat, Oman)
Article Type:Financial report
Date:Apr 25, 2011
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