Wednesday, Jan 18, 2012

RIYADH (Zawya Dow Jones)--Dar Al Arkan Real Estate Development Co. (4300.SA), Saudi Arabia's biggest developer by market value, said Wednesday fourth-quarter net profit dropped 12.3% to 289.6 million Saudi riyals ($77.2 million), still beating most analyst expectations, due to a drop in revenue amid lower sales.

The fourth-quarter result was above several analyst expectations. Bahrain-based SICO Investment bank had expected the developer to post a net profit of SAR277.9 million, while Cairo-based EFG Hermes had penciled in SAR233 million.

Full-year net income stood at SAR1.09 billion, compared with SAR1.46 billion for 2010, while earnings per share for the year stood at SAR1.01, compared with SAR1.35 a year earlier, the company said in a statement posted on the Saudi bourse website.

"The decrease in net income during the three month and the twelve month period compared to the same periods in the previous year is an account of lower land sales as the company sought to enhance gross margins and lower residential sales due to lower available completed units," Dar Al Arkan said.

Fourth-quarter operational profit fell 10% year on year to SAR315.2 million, it added.

The Saudi firm said its fourth-quarter net profit rose 27.3% compared to the third quarter of 2010, mainly due to higher sales and demand in the period.

Moody's withdrew Dar Al Arkan's ratings in January last year, citing "business reasons." The agency's last credit-rating action on the real-estate firm was in November 2010 when it was lowered one level to 'Ba3', the third-highest non-investment grade, citing maturing debt and decline in land sales.

Last year, Dar Al Arkan said the state-run Public Investment Fund had approved providing SAR4 billion to help finance the Qasr Khozam development in Jeddah's central district. The funds will allow the start of the phase covering the distribution of eviction notices, compensation procedures, and of measures to transfer ownership of property located in the project's site.

-By Summer Said, Dow Jones Newswires; +966-546-842373; summer.said@dowjones.com

Copyright (c) 2012 Dow Jones & Co.

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18-01-12 1336GMT