Emaar Properties 2010 net profit rises 31%

UAE developer gains from mall and hotel revenue as income rises 38%

Emaar sold 770 units in the Burj Khalifa last year.
Emaar sold 770 units in the Burj Khalifa last year.

Emaar Properties, developer of the world’s tallest tower in Dubai, saw net operating profits rise by nearly a third against 2009, with revenues increasing by almost half, according to preliminary figures released by the company.

Recurring income from malls, retail and hospitality made a significant contribution to the real estate company’s top line as revenues rose 44% to AED12.15billion, up from AED8.413billion. Fourth quarter revenues rose against the third quarter by 38% to AED3.83billion.

After-tax operating profits rose 31% to AED3.03billion against AED2.324billion in 2009, with the fourth quarter gaining marginally against the third. But net income fell 62% to AED 274 million from AED 720 million a year earlier.

“In a year that was marked by cautious optimism, timely delivery of property and consolidation of core businesses, Emaar Properties took bold initiatives that have far-reaching potential in driving sustained returns for our stakeholders,” said Mohamed Alabbar, who at the end of 2010 told a conference audience that Dubai would never stop taking risks.

Emaar handed over 3,500 units last year, including 770 in the Burj Khalifa, which opened last January and recently celebrated its first anniversary.

It also handed over healthcare and education developments to service providers, and this year plans to hand over homes in Jeddah Gate and Al Khobar Lakes in Saudi Arabia through Emaar Middle East. It also plans to hand over plots in Turkey and Egypt through its subsidiaries in these countries.

Emaar Properties has been one of the most popular real estate companies in the region with international investors, issuing a US $500 million convertible bond in September that listed on the Luxembourg Stock Exchange that was heavily oversubscribed as well as a $500million Sukuk last month. The company is seeking to pay down debts that mature this year with longer-term borrowing.

The annual results compare starkly with those of Aldar Properties, Abu Dhabi’s biggest developer, which yesterday said it made a loss of more than AED12billion for the year on the back of a fair-value adjusted property portfolio that has been hit hard in the economic downturn.

Last month it sold assets on Yas Island to the government and sold a AED2.8billion convertible bond to Mubadala Development Company, the state-backed investor.

Emaar shares have rebounded since a sharp dip at the end of January, though closed down 1.21% to AED3.25 yesterday.

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