Dubai's Emaar Development mulls withholding dividends after profit plunge

Board of directors recommends not to distribute 2020 payout to shareholders

  
Emaar buildings, real estate property development company, and The Address apartment building, Downtown, Dubai, United Arab Emirates.

Emaar buildings, real estate property development company, and The Address apartment building, Downtown, Dubai, United Arab Emirates.

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Emaar Development, a subsidiary of Dubai’s largest listed developer Emaar Properties, is considering a proposal to withhold the distribution of dividends to shareholders.

The plan, proposed by the company’s board of directors, will be discussed during the third annual general meeting next month, according to a bourse filing to the Dubai Financial Market (DFM) on Wednesday.

This comes as the business saw net profits tumble 38 percent to 1.657 billion dirhams ($451 million) over the past year due to the health outbreak.

The company is the build-to-sell property development business that is majority-owned by Emaar Properties, which had also reported a 57 percent decline in net profits for 2020.

It said earlier that the business delivered resilient results for 2020 despite the challenges posed by the coronavirus pandemic.

“We remained focused on progressing at great speed with all of our projects during 2020… Our proven agility allowed us to achieve robust results in the second half of the year. We expect this vigorous trend to continue in the year ahead,” Mohamed Alabbar, founder of Emaar Properties and Emaar Development, said earlier.

The UAE property market suffered the worst of the economic effects of the pandemic last year. Sales onlystarted to improve towards the end of 2020, as investors and first-time buyers took advantage of low prices.

Emaar Development reported that its sales during the fourth quarter of 2020 went up by 75 percent compared to the previous quarter.

(Writing by Cleofe Maceda; editing by Seban Scaria)

Cleofe.maceda@refinitiv.com

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