Emaar Q1 net surges 44pc, beats forecast
Dubai, April 28, 2012
Dubai's Emaar Properties reported a 44 per cent rise in first-quarter profit on Saturday, beating analysts' forecasts, as the developer shifted away from the battered property market and booked gains in its retail and hospitality operations.
The builder of the world's tallest tower made a profit of Dh606 million ($165 million), compared to Dh421 million during the same period last year, it said in an emailed statement.
Analysts polled by Reuters had forecast an average profit for the quarter of Dh496.75 million.
The revenue was Dh1.8 billion, with malls and retail businesses contributing Dh651 million and hospitality contributing Dh403 million, the company said in its statement.
Revenues from the firm's malls and hospitality segments grew 25 per cent compared to the same period in 2011.
Emaar, which saw sales of apartments plunge 85 per cent last year, is gradually shifting its focus from the bleak Dubai property market towards the more profitable hospitality and retail sectors.
Dubai's largest developer by market value sold 158 residential units during the period, of which 117 were in Dubai and 41 units in the international markets.
New unit sales in Dubai exceeded Dh620 million in the quarter, the company said.
Commenting on the performance, Mohamed Alabbar, the chairman of Emaar Properties, said: "We have entered a new era of growth for Emaar, focused on identifying new growth opportunities in line with the fast-changing economic environment."
"Our strength has always been in envisaging and executing prime real estate assets that contribute significantly to the economies we serve in. In Dubai, our assets are a prime driver of tourism, hospitality and retail, the traditional sectors that boost economic growth."
House prices in Dubai have tumbled about 60 per cent from a 2008 peak and no turnaround is expected this year, with supply continuing to outstrip demand.
Emaar's 2011 earnings report showed it was owed 595 million dirhams by troubled mortgage affiliate Amlak, in which it has a 48 percent stake. Emaar claimed the amount was fully recoverable.
The federal government cut Amlak's debt burden by $1.1 billion, in a renewed effort to revive the lender, whose stock has been halted since 2008.-Reuters