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Emaar posts Dh843m profit

By Issac John DUBAI - Emaar Properties , the builder of the world's tallest tower, on Tuesday recorded a net operating profit of Dh843 million in the first six months of 2011, and said it would roll out a five-year corporate strategic action plan to drive long-term value creation.

Despite a drop in delivery of new units in the second quarter, the better performance was due to "superior performance of the hospitality and malls businesses and higher margins," the Dubai-based developer said.

For the second quarter, Emaar posted a "net operating profit" of Dh 422 million, down 52 per cent compared to the net operating profits of Dh896 million for the same of 2010 while its "net profit" dropped 69 per cent to Dh250 million compared with the Dh802 million booked in the same period 
a year earlier.

"Second-quarter results were supported by the continued delivery of residential units in Burj Khalifa and in its premium commercial project, Boulevard Plaza, located in downtown Dubai," Emaar said in a statement.

Revenue for the second quarter of 2011 was Dh2.032 billion, marginally higher than first quarter 2011 revenue of Dh1.983 billion but 23 per cent lower compared to the same 2010 period. Emaar booked a write-down of Dh172 million for its stake in Dubai Bank, compared with a year- earlier write-down of Dh41 million.

"Second quarter results were supported by the continued delivery of residential units in Burj Khalifa and in its premium commercial project - Boulevard Plaza --located at Downtown Dubai," the developer said.

Emaar share were little changed in Dubai trading at Dh2.88 at the 2 p.m. close in Dubai. The shares have dropped 19 per cent so far this year, giving the company a market value of Dh17.5 billion. Emaar said it commenced handover of villas at the coastal development of Umm Al Quwain Marina during the second quarter. It handed over approximately 244 units during the quarter as compared to 270 units and 612 units during the first quarter of 2011 and second quarter of 2010 respectively. "However, due to continued superior performance of the hospitality and malls businesses and higher margins recorded on the deliveries during 2011, the gross margins during the first half of 2011 increased significantly as compared to the same period in 2010."

The Dubai Mall, the flagship development of Emaar Malls Group, reported first half 2011 footfall of 26.2 million visitors as compared to 23.7 million visitors in the first half of 2010.

Emaar Hospitality Group, the hospitality and leisure subsidiary, also recorded strong performance with its flagship Address Hotels plus Resorts recording an average occupancy of 85 per cent in the first half of 2011.

During the second quarter, the revenue from rental and hospitality income was similar to the first quarter of the year and was 24 per cent higher as compared to the second quarter of 2010. The revenue from these business segments accounted for 41 per cent of the total revenue.

Mohamed Alabbar, Chairman, Emaar Properties , said the financial performance of the company in the first six months of the year was marked by continued deliveries of homes and offices in Downtown Dubai and sustained growth by the company's hospitality & leisure and shopping malls & retail businesses. " Emaar is now embarking on a new phase of growth with a core management team in place to roll out a five-year corporate strategic action plan for driving long-term value creation. Having redefined the property landscape of Dubai through our fully established master-planned communities, Emaar 's current focus is on identifying and strengthening our operations by taking into account the current social, economic and political changes across all our key markets," said Alabbar. "Our approach is underlined by two goals: adding value to our stakeholders, and serving as a catalyst for positive change across the economies we serve by creating new jobs for youth and supporting the economic diversification goals of governments," he said.

Emaar said its growth initiatives would continue to be aligned with the diversified economic growth model of Dubai. Emaar , The Economic City, the Tadawul-listed entity in which Emaar Properties is a key stakeholder, is progressing with the King Abdullah Economic City, the largest of its kind private-sector development 
in the region.

The Saudi Arabian Ministry of Finance recently signed a loan agreement with the company for $1.33 billion to accelerate the completion of the second phase of the mega-development.

Emaar Middle East, a country subsidiary, is focused on the handover of homes in Jeddah Gate and Al Khobar Lakes, two of the prestigious master-planned communities that are set to energise the local economy.

The two projects saw a solid response from investors in the first phase.

Emaar said its developments in Egypt are also progressing well and construction is being carried out at all projects launched and sold.

© Khaleej Times 2011