Emaars Indian subsidiary suffers Rs2b loss as materials costs soar

Wednesday, Jul 06, 2011

Gulf News

Dubai: Emaar Properties Indian subsidiary made a net loss of Rs2.05 billion (Dh170.4 million) in the first quarter of this year, the company said yesterday.

Emaar MGF, a joint venture between Dubai-based real estate developer Emaar Properties and Indias MGF Development Limited, also saw total income decline 1.25 per cent to Rs10.5 billion in 2010-11 from Rs10.6 billion the previous year, the company said in a posting to the Bombay Stock Exchange. Emaar MGF dismissed rumours earlier this year that it was valuing the assets of its joint venture with MGF Developments in preparation for an exit or partial sale.

Under fire

The company came under fire after building the 63.5 hectare Commonwealth Games Village in New Delhi a development plagued by poor construction work and delays. The developer was penalised by Indian authorities who cashed its $45 million (Dh165.2 million) bank guarantee.

Emaar Properties declined to comment yesterday on the first-quarter performance of its subsidiary.

Rising expenditure

During the last fiscal year, expenditures of Emaar MGF soared by 23.87 per cent to Rs10.02 billion from Rs8.09 billion in the year-ago period, the filing said.

The company also said its raw materials cost went up by 17.24 per cent to Rs6.33 billion from Rs5.4 billion in 2010-11.

By Kevin Scott, Staff Reporter