Dubai’s Emaar Properties, builder of the world’s tallest tower, shrugged off a weakening local market to report a 17% increase in first-quarter net profit yesterday as sales rose and its hospitality and retail units also prospered.
The developer, in which Dubai’s government owns a minority stake, made a net profit of 1.21bn dirhams ($330mn) in the three months to March 31, it said in a statement. That compares with a profit of 1.03bn dirhams in the year-earlier period.
SICO Bahrain forecast Emaar’s first-quarter profit would be 1.22bn dirhams.
Emaar’s chairman this month said he had been “really scared” of market conditions coming into 2016, but these fears may have been allayed by a 70% rise the value of Emaar’s first-quarter property sales to 4.19bn dirhams.
That increase was achieved despite the emirate’s property prices in steady decline from a 2014 peak and with industry experts forecasting further drops this year.
Emaar’s property unit generated 1.97bn dirhams in first-quarter revenue, up 32% on a year ago. The company does not book immediately book property sales as revenue; it is steadily included in line with construction.
Emaar Malls, majority-owned by Emaar, last week reported a 22% rise in first-quarter net profit to 529mn dirhams.
Its hospitality, commercial leasing and entertainment unit, which includes its hotel assets, generated quarterly revenue of 722mn dirhams, Emaar said. It did not provide a year earlier figure, but said its Address-branded hotels achieved 93% occupancy. This figure excludes Address Downtown hotel, which was ravaged by fire on New Year’s Eve.
An Emaar executive last week said this hotel would not re-open this year, while the company in its 2016 earnings took a 301mn dirham writedown relating to the blaze.
Emaar’s first-quarter revenue was 3.53bn dirhams, also up 17% from a year earlier.
Dubai Financial Market
Dubai Financial Market (DFM), the Gulf’s only listed stock exchange, reported a 27% rise in first-quarter net profit yesterday as trading activity increased.
The firm made a net profit of 86mn dirhams ($23.4mn) in the three months to March 31, up from 67.7mn dirhams in the year-ago period, it said in a statement.
Trading commissions are the main source of income for DFM, and 40.6bn dirhams worth of shares were traded in the first quarter of 2016, up from 37.7bn dirhams a year earlier.
Dubai’s government owns a majority stake in DFM through holding company Borse Dubai.
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