Emaar first quarter profit climbs 55%
Earnings hit Dh863 million; results underline healthy growth of Dubai’s economy
The robust growth of Dubai’s economy and its status as a safe haven for investments helped boost Emaar Properties’ net profit more than 55 per cent for the first quarter of 2014 compared to the same period last year, the company said on Tuesday.
The builder of the world’s tallest tower, Burj Khalifa, declared a profit of Dh863 million ($234.96 million) for March quarter, compared to Dh556 million in the year-ago period.
The quarterly results beat analysts’ average forecast. The average of four analysts was Dh739 million, according to data compiled by Bloomberg, while analysts polled by Reuters had forecast profit of Dh873 million. Emaar’s share price increased by 1.4 per cent to Dh10.75 on Tuesday with a 20.7 million trading volume. During the first quarter, Emaar stocks’ value has appreciated by more than 30 per cent. Emaar reported a Dh2.26 billion revenue, up from Dh2.11 billion a year earlier, of which 38 per cent, or Dh863 million, came from Emaar’s malls and shopping unit, and 16 per cent, or Dh483 million, from its hospitality and leisure unit.
Chairman Mohamed Alabbar said the strong performance has been underlined by the robust growth of Dubai’s economy.
Emaar’s shopping malls and retail and hospitality and leisure businesses together contributed Dh1.346 billion in recurring revenues during the quarter, nearly 60 per cent of the total revenue and 15 per cent higher than 2013 first-quarter revenues of Dh1.166 billion. “The increase in tourist arrivals to Dubai and the positive market sentiment have catalysed the growth of our shopping malls and hospitality business too, which contribute significantly to our recurring revenues,” Alabbar said.
Emaar plans to list up to 25 per cent of the Emaar Malls Group equity through a secondary offering of shares. The funds thus raised, estimated to be between Dh8 to 9 billion, will primarily be distributed as dividend to the company’s shareholders.
“This year, led by our strategy to monetise key performing assets, expand to high-growth international markets and develop prime real estate assets in Dubai, we will continue to focus on delivering long-term value for our shareholders and in providing exceptional service standards to our customers,” the chairman said.
The first quarter was underscored by several new project launches by Emaar in Dubai with strong investor interest from international markets. The value of total sales during the quarter is Dh5.917 billion, 94 per cent higher Dh3.043 billion sales during same period in 2013, the company said.
In international project sales, Egypt recorded strong increase in value at Dh546 million in the first quarter. Significant investor response was also recorded for Emaar’s projects in Pakistan, with the value of sales in the first quarter at Dh235 million. As part of its international expansion, Emaar signed a memorandum of understanding with Abdul Latif Jameel, Saudi Arabia’s leading business group, to develop integrated property projects in the kingdom.