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Dubai’s Emaar Properties Q3 net profit rises 31 per cent

Emaar Properties reported a 31 per cent jump in third-quarter profit on Sunday as rising property sales overcame the wider real estate market malaise.

But some analysts were expecting more and point to the weakening hotel and residential property markets.

EFG Hermes had predicted profit of just over Dh1 billion.

Dubai’s biggest listed developer said net profits in the three months to the end of September rose to Dh843 million – up from Dh645m a year earlier. Revenue surged by more than half to Dh3.3 billion.

“Emaar profits came out at about 10 per cent below consensus, which was a bit of a surprise to us,” said Sebastien Henin, the head of asset management at The National Investor in Abu Dhabi. “We expect the main reasons for this to be the weaker hospitality market and a weakening of the domestic sales market.”

Emaar said profits for the first nine months of the year rose 16 per cent to Dh3bn compared to a year earlier.

Revenue for the same period rose by 25 per cent to Dh9.8bn.

The company which built the Burj Khalifa, the world’s tallest tower, and The Dubai Mall said that recurring revenue from its malls and hotels business grew to Dh4.2bn during the first nine months of the year, 10 per cent higher than the previous year.

It said it had made Dh7.5bn worth of property sales during the first nine months of the year. By comparison, last year the company said it had received Dh3.1bn of revenue from selling villas, apartments, land and offices over the same period.

International operations also rose to Dh1.7 bn in the year to the end of September 2015, an increase of 21 per cent on the previous year.

“With Dubai now welcoming the festive season that further energises the tourism and hospitality sectors, we are confident of closing the year on a robust and positive note,” said the Emaar chairman Mohamed Alabbar.

Last month the property broker JLL reported that average apartment prices in Dubai fell 11 per cent compared with a year earlier because of the strong dirham, higher sales transaction fees and mortgage caps.

Emaar shares fell 3.8 per cent in trading on Sunday, closing at Dh6.20 – before the developer released its financial results.

The Ras Al Khaimah-based developer RAK Properties failed to lift the mood in the sector when it also reported on Sunday.

The developer announced profits sank six-fold compared with the previous year on the back of a continuing slump in sales.

Profit for the three months to the end of September 2015 fell to Dh4.8m, down from Dh32.8m a year ago the company said.

In results filed with the Abu Dhabi Securities Exchange, RAK Properties reported that profits for the first nine months stood at just Dh27.5m, down from a total of Dh84.4m a year earlier.

Revenue also fell 37.1 per cent from Dh66.3m to 41.7m.

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