Emaar Q3 net profits down a third

Dubai-listed regional real estate benchmark Emaar Properties today announced a 34 per cent decline in its third quarter net profits, from Dh612 million in Q3 2010 to Dh406m in Q3 2011, according to its financial results posted on Dubai Financial Market website this afternoon.

The developer of Burj Khalifa, the world’s tallest tower, said third quarter revenues declined 33 per cent to Dh1.86 billion for the quarter ended September 30, 2011, from Dh2.78b in the corresponding quarter of last year.

An Emaar media statement accompanying the results said the property major delivered 712 units in Dubai the first nine months of the year, of which 201 units were handed over in the third quarter, adding that Emaar remains committed to future deliveries.

“In the first nine months of the year, Emaar further expanded its Dubai portfolio with the delivery of residential units and commercial offices in Burj Khalifa, its dedicated office development in Downtown Dubai – Boulevard Plaza – and its first office development in Dubai Marina – Marina Plaza,” the statement said.

Internationally, Emaar’s Jordan associate handed over homes in Samarah Dead Sea Resort while its Syrian subsidiary handed over commercial offices in the Eighth Gate. The company said it is on track to deliver its first homes in Saudi Arabia at Al Khobar Lakes development and Jeddah Gate in the coming months, while it is also progressing with the handover of homes in Egypt.

“The nine-month performance of Emaar was underlined by the sustained growth of its hospitality and leisure and shopping malls and retail subsidiaries, the continued demand for homes and commercial space within its established communities such as Downtown Dubai, and the handover of prime real estate assets in international markets, including Turkey, Jordan and Syria,” the company pointed out.

“Residences in several master-planned developments of Emaar in other global markets including Saudi Arabia and Egypt – two of the biggest markets in terms of demand for ‘affordable luxury’ homes – will be handed over shortly, adding to the company’s revenue stream in the coming months,” it added.

“Dubai’s growth vision, as outlined by Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice-President and Prime Minister, and Ruler of Dubai, focuses on promoting its retail, tourism and hospitality sectors,” said Mohamed Alabbar, Emaar’s Chairman.

“By creating global icons and prime real estate assets, Emaar has consistently focused on delivering Dubai’s vision, creating new jobs and powering the growth of ancillary industries,” he added.

The company is following a geographic diversification strategy to maintain future growth. “Emaar’s focus on emerging markets and further driving its profitable subsidiaries is strategic, and in line with our commitment to offer long-term value to our stakeholders,” Alabbar said.

Recurring revenues from the hospitality and shopping malls businesses of Emaar accounted for nearly 41 per cent of total revenue in the first nine months of the year, the company said.

“The shopping malls business of Emaar recorded robust growth in revenue during the first nine months of 2011 with the total rental and related revenue for the period being approximately Dh1.6 billion ($436 m). The Dubai Mall, its flagship mall development, welcomed 39 million visitors during the period – 13 per cent higher than visitors in 2010 for the period. The mall is on course to crossing the 50 million visitor mark this year,” the Emaar media statement said.

“Emaar’s hospitality business also contributed significantly to group revenues with The Address Hotels + Resorts, its flagship hotel brand. In spite of the third quarter being a seasonally lower period for hospitality business, The Address Hotels + Resorts recorded an average occupancy rate of 80 per cent during the first nine months of the year. Revenue from the hospitality & leisure business during the first nine months was Dh844m ($230m),” it added.