Dar Al-Arkan Q3 net falls 53pc on lower sales
Dubai, October 21, 2010
Saudi-based Dar Al-Arkan Real Estate said on Thursday its third-quarter net income fell 53 percent due to lower land and home sales, falling short of analyst's estimates.
The kingdom's largest real estate firm made a net profit of 289.6 million riyals ($77.22 million) in the quarter, down from 616.2 million rials in the same period last year, it said in a statement on Nasdaq Dubai.
"This decrease in sales was coupled with lower profit margins incurred on land and residential unit sales which is attributable to the geographical locations of the products sold," the company said in a statement, adding the slower summer period which included the Muslim holy month of Ramadan, was behind lower sales.
Estimates for Dar Al-Arkan's net profit ranged from 323 million riyals to 532 million riyals in a Reuters survey earlier in October.
Net income for the nine-month period fell to 1.1 billion riyals from 1.7 billion riyals, while third quarter net income fell 33.7 percent from the second-quarter, it said.
The developer expects rent income to gradually rise from near-zero last year to 1 billion riyals by end-2015, its general manager Saud Al-Gusaiyer told Reuters in August.
Saudi Arabia, the biggest Arab economy, needs 150,000 homes annually as demand for residential property soars, real estate investment and advisory firm Jones Lang LaSalle told the Reuters Middle East Investment Summit in Riyadh on Wednesday.
Dar Al-Arkan's shares closed 1.6 percent lower at 9.2 riyals a share on Wednesday. Saudi Arabia's bourse is closed for the weekend on Thursday and Friday. - Reuters