Emaar records 5%drop in Q3 profit to Dh387m

posted on 24/10/2012: 431 views

Emaar Properties, Dubai's biggest property developer by market value, saw third quarter net profit drop five per cent to Dh387 million year on year due to "seasonal trends,” it said in a statement on Tuesday.

Net profit fell to Dh387 million from Dh406 million in the same quarter last year, the company said. The seasonal slowdown comes during Ramadan and the long hot summer months when revenue grows less strongly.

Revenue declined 12 per cent in the third quarter to Dh1.64 billion from Dh1.86 billion in the same period last year, Emaar said.

However, in the first nine months of this year Emaar recorded net profit of Dh 1.61 billion, up 49 per cent from Dh1.08 billion in the same period last year.

Mohammad Al Abbar, Chairman of Emaar Properties, said that the Dubai real estate market is seeing an "ongoing upward price revision as well as a high level of demand for new projects in strategic locations.”

Emaar will continue to "explore new growth opportunities,” he added. It had recently announced several projects outside Dubai including the Cairo Gate project with Al Futtaim and an MoU with the Iraqi government for housing projects in the war-torn country.

Revenues from Emaar's shopping mall and retail businesses, that includes the Dubai Mall, increased by 18 per cent to Dh1.88 billion in the first nine months of this year compared to the same period last year, it said.

Emaar's hospitality and leisure businesses recorded revenue of Dh973 million in the first nine months, up by 15 per cent from Dh844 million during the same period of 2011, according to the company.

There has been a gradual revival in the Dubai property market and Emaar said it launched three new projects that contributed Dh3.08 billion to sales in the first nine months of 2012.

Commenting on the third quarter net profit results, Taher Safieddine, a financial analyst at Shuaa Capital, said in a review: "These numbers came in 13 per cent below our Dh443mn estimate.”

"Revenues came in at Dh 1.64 billion, missing our Dh1.89 billion estimate and down 12 per cent year on year. This was mainly due to lower property revenues (slower delivery of units) and weaker-than-expected recurring business as third quarter is the weakest quarter for hospitality and retail operations,” he said. – Gulf News

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