Emaar Properties' profit fell 34 per cent in the third quarter as Dubai homes sales slowed
Emaar suffers as home sales slide
Slowing home sales in Dubai sent Emaar Properties' profit down nearly 34 per cent for the third quarter from the same period a year ago.
The company reported profit of Dh406 million (US$110.5m), compared with Dh612m in the third quarter of last year. Revenue fell 33 per cent, from Dh2.7 billion to Dh1.8bn for the quarter, according to the company's preliminary financial statement.
The company's net profit was down 50 per cent for the nine months ending September 30, to Dh1.07bn from Dh2.17bn in the same period last year.
"The headline numbers are largely in line with our expectations," said Mohammad Kamal, an analyst with Arqaam Capital. "We expected the slowdown in property sales and handovers domestically."
Emaar did not address the reasons for the drop in profit and revenue in its statement filed with the Dubai Financial Market. Instead, the company noted "sustained growth of its hospitality and leisure and shopping malls and retail subsidiaries".
Recurring revenue from the hospitality and shopping malls business accounted for about 41 per cent of the company's total revenue in the first nine months.
Emaar handed over 712 units in the first nine months, including 201 in the third quarter. The nine-month performance included handovers of units in Turkey, Jordan and Syria, where the company completed the first phase of the Eighth Gate project before the outbreak of political turmoil.
Last year, Emaar's numbers were boosted by handovers of apartments in the Burj Khalifa.
The company reported its results after the close of a volatile day of trading in its shares. More than 20.5 million shares changed hands, making it the most traded stock on the Dubai exchange.
Emaar closed at Dh2.60 a share, a 4.8 per cent increase on the day, the largest single-day jump in its share price since March 9.
This week Emaar announced plans to launch a division focused on developing affordable housing projects around the region. Mohamed Alabbar, the Emaar chairman, announced the company was looking to raise $700m in financing from banks.
"Emaar's focus on emerging markets and further driving its profitable subsidiaries is strategic, and in line with our commitment to offer long-term value for our stakeholders," Mr Alabbar said.