YTD net profit falls 555% at Saudi's Emaar, The Economic City
Revenue at the Saudi-based developer of the King Abdullhah Economic City (KAEC) also dropped by a fifth compared to 9M 2017
Net profits for the first nine months (9M) of 2018 fell 555.8% at Emaar, The Economic City (Emaar EC), with total revenues also falling by a fifth during the same period compared to the same time in 2017, a stock exchange filing has revealed.
According to the Saudi developer’s interim financial results on Tadawul, Emaar EC – the developer of the King Abdullhah Economic City (KAEC) – experienced a $52.2m (SAR196m) net profit loss after Zakat and tax for the nine month period ending 30 September 2018.
This represents a 555.8% drop on the same period last year, when net profit stood at $11.5m (SAR43m).
In the same bourse filing, Emaar EC said the reason behind this loss was that “gross profit [GP] in the corresponding period was higher primarily due to higher industrial land sales and higher progress made on the industrial land projects as compared to the current period”.
“Moreover, loss on new operating assets during [the] current period has also led to the gross loss for the current period,” the developer added, citing an “increase in administrative, selling, and marketing expenses (mainly due to launch of new projects and certain CSR activities)", which also contributed to the gross loss for the current period.
Total revenues for 9M 2018 stood at $173.4m (SAR637m), a 21% drop on same period last year when it brought in $220.5m (SAR810m).
Third quarter profits fared not much better at Emaar EC, which is tasked with leading the master-planning and development of KAEC, located in the north of Jeddah.
Between July and September 2018, the Tadawul filing read, the developer saw a net profit loss, after Zakat and tax, of $40m (SAR150m) – a 655% drop on Q3 2017 when the figure stood in the black at $7.2m (SAR27m).
Emaar EC explained this loss, in part, by a “decrease in other income and share of income from a joint venture; increase in depreciation, marketing, and administrative expenses; increase in Zakat and impairment loss; and gain on revaluation of interest rate swap arrangement made by an investee”.
The figures came two months after Emaar EC appointed Ahmed bin Ibrahim Linjawi as its chief executive officer following the resignation of Fahd bin Abdul Mohsen Al Rasheed.