Emaar first-half profits fall more than half
Developer sees apartment sales slump 85% as market remains subdued
Emaar Properties saw its net profit slashed by more than half for the first six months of 2011 against the same period last year as apartment sales values fell by 85% in the second quarter.
Dubai’s biggest developer said it made AED 775.69m ($211.18m) between January and June, down from the AED 1.55bn ($421.9m) posted last year. Overall revenue has declined by more than a quarter to AED 4.01bn ($1.09m), a figure reduced by losing AED 172m ($46.82m) through the impairment of its assets, despite increases in its commercial unit and hospitality sales.
Net profit for the second quarter had fallen by a similar percentage, from AED 795.3m ($216.52m) to AED 328m ($89.29m) in a year, even though revenue and the related costs had remained steady.
Revenues from sale of apartments were AED265.6m ($72.3m) in the second quarter, compared with AED1.7bn ($462.8m) in the same period in 2010, a fall of 84%.
The company’s decline in revenue comes as a stark reminder of the slump in the property market in UAE’s second biggest emirate. Emaar, developer behind the Burj Khalifa tower which opened at the start of last year, has aimed to generate the majority of its earnings from recurring-income ventures, such as its investments in building malls and hospitals.
It has also sought to develop projects throughout the Middle East, targeting Saudi Arabia in particular with a specific subsidiary in the country.
Revenues from its hospitality grew a fifth to AED283.76m ($77.25m) from AED236.1m ($64,.28m), the statement showed, and income from sale of units and land rose to AED 596.5m ($162.40m) from AED176.7m ($48.10m). Revenue from sale of villas also increased to AED337m ($91.74m) from AED54.4m ($14.81m).
Other income revenues include the AED 1.835bn ($499.5m) generated from the income of the company’s Sukuk, issued last year, and AED 888m ($241.75m) from interest-bearing loans.
Emaar Properties shares were trading 0.355% lower at AED 2.81 in afternoon trading in Dubai.