Emaar Properties swings to Q4 profit
Dubai, February 11, 2010
Dubai's Emaar Properties said on Thursday it would focus on developing middle income housing in emerging markets in 2010 after returning to profit in the fourth quarter, but missing most analysts' forecasts.
Net profit in the three months to Dec 31 was 720 million dirhams ($196.1 million) compared to a loss of 2.4 billion dirhams in the fourth quarter of 2008, it said in a statement.
An average of analysts polled by Reuters in January forecast a profit of 761 million dirhams in the fourth quarter for Emaar.
Emaar said on Jan 4 it will focus on international projects where it was already present, and that Dubai's property prices have stabilised. It also said, at the launch of the world's tallest tower, the company would look at developing subsidiaries such as hospitality and hospitals.
"This year, Emaar will also focus on middle income housing as a strategic growth area to meet the growing demand for homes in emerging markets," it said the statement, citing India, Egypt and Pakistan as potential growth areas.
Emaar said it had delivered about 3,100 units during 2009, lower than the 4,900 delivered in 2008, but had seen revenues in its malls and leisure businesses increase significantly.
Revenues in the fourth quarter were up 94 percent year on year to 2.99 billion dirhams.
Emaar, 31.2 percent owned by the Dubai government, is the Arab world's largest listed developer, but is less indebted than other Dubai property firms, with about 8.1 billion dirhams ($2.21 billion) of loans and borrowings outstanding as of September 2009 of which about half is due this year.
Emaar opened the world's tallest tower earlier this year and cancelled a merger with the property units of indebted state-linked firm Dubai Holding in December of 2009.
The developer said net operating profit decreased due to provisions made by affiliates including mortgage lender Amlak and Dubai Bank towards their loans and advances portfolio
It took impairments of 234 million dirhams for the year on certain assets and associated companies, it said.
Full year net profit rose 98 percent to 327 million dirhams.
Credit Suisse upgraded Emaar Properties to "outperform" from "neutral" on Dec 15, saying the cancellation of the company's proposed merger with Dubai Holding's eliminated Emaar's exposure to additional real estate assets in Dubai.
Emaar shares closed 3.2 percent higher on Thursday before its results were released. - Reuters