Emaar Properties Q1 net profit rises 7% Dh1.026 billion

Emaar Properties recorded a net profit of Dh1.026 billion ($279 million) during the first three months of 2015. This is 7 per cent higher than the net profit of Dh957 million ($ 61 million) in first-quarter (January to March) 2014 calculated as per revised accounting policy for revenue recognition.

Profitability increase in Q1 2015 would have been 14 per cent if the Malls listing at the end of 2014 is not considered.

Starting from Q1 2015, Emaar has opted for early adoption of the International Financial Reporting Standard 15 (IFRS 15) and recognises revenue based on percentage construction completion instead of on completion and handover.

Revenue for Q1 2015 reached Dh3.013 billion (US$ 820 million), which is 25 per cent higher than Q4 2014 revenue of Dh2.409 billion ($656 million) and 26 per cent higher than Q1 2014 revenue of Dh2.392 billion ($651 million).

The sustained growth in net profit and revenue is supported by the increase in recurring revenues from the group’s shopping malls, retail and hospitality businesses, which together stood at Dh1.523 billion ($415 million) in Q1 2015, 13 per cent higher than Q1 2014 figures of Dh1.346 billion ($366 million). Malls, retail and hospitality revenue now account for 51 per cent of the total group revenue. The group’s international operations also contributed 11 per cent of the total revenue amounting to Dh346 million ($94 million).

Emaar recently announced the distribution of a cash dividend of 15 per cent of the share capital equivalent to around Dh1.074 billion ($292 million).

Mohamed Alabbar, Chairman of Emaar Properties, said the positive growth in profits reflects the success of the company’s focus on project management. “We are committed to creating long-term value for our stakeholders through strategic business expansion in Dubai and other key international markets, where we are expanding our hospitality and malls operations too. In Dubai, in addition to committed delivery schedule, we are launching new real estate assets that meet demand from buy-to-live customers.”

He added: “We have made significant progress in two mega joint venture projects, Dubai Creek Harbour at The Lagoons with Dubai Holding and Dubai Hills Estate with Meraas Holding. These smart cities of the future support the ongoing preparations for the Expo 2020 UAE and will meet current and emerging demand for homes, serviced residences, retail and hospitality services in the city.

Recording a revenue of Dh1.490 billion ($406 million) from its core business of property development during Q1 2015, Emaar marked robust sales during the first three months valued at over Dh2.467 billion ($672 million) in Dubai. This was led by the launch of the Azalea villa community in the Arabian Ranches extension, Fairways & Acacia at Park Heights in Dubai Hills Estate and Dubai Creek Residences South Tower II & III in Dubai Creek Harbour at The Lagoons.

Subsequent to Q1 2015, Emaar also launched Downtown Views in Downtown Dubai, as part of the expansion of The Dubai Mall as well as Maple, the first townhouse community in Dubai Hills Estate. The launch of Dubai Creek Residences in Dubai Creek Harbour also recorded significant response from investors.

In international markets, Emaar made strong progress in the development of integrated master-planned communities in the Kingdom of Saudi Arabia, Egypt, Turkey, Pakistan and Lebanon, among others. Several residential units are being handed over in these markets.

Emaar’s hospitality and leisure business served as a strong growth driver of the company’s performance with revenues of Dh 495 million ($135 million) in Q1 2015. This is similar to the Q1 2014 hospitality revenue.

The Address Hotels + Resorts reported average occupancy of 92 per cent during the first three months of this year, while Vida Hotels and Resorts recorded 91 per cent occupancy. Vida also opened its second property in Dubai, Manzil Downtown Dubai.

Emaar Hospitality Group also launched its third hotel brand, Rove Hotels, a mid-market lifestyle hotel brand that plans to operate 10 hotels in key locations in Dubai, developed by a joint venture of Emaar Properties and Meraas Holding.

Growth in malls business

Emaar Malls, the shopping malls and retail business majority-owned by Emaar, recorded Q1 2015 revenue of Dh735 million ($200 million), 21 per cent higher than Q1 2014 revenue of Dh605 million ($165 million). The mall assets of the company in Dubai welcomed over 31 million visitors during the first three months.

Emaar has a land bank of 235 million sq in Dubai and other international markets. The company has more than 690,000 sq m of recurring revenue generating assets apart from 13 hotels with over 1,900 rooms.

Emaar marked another achievement with the roll-out of the world’s first hydrogen-powered, zero-emission street trolley tram, the Dubai Trolley. Operational on Mohammed bin Rashid Boulevard, Dubai Trolley is the region’s first-of-its-kind hop-on hop-off transit system that will offer easy and free access for visitors and residents to several attractions in Downtown Dubai.
 

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