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Emaar profit up 41% to Dh1.7billion

August 5, 2014

Dubai's strong credentials as a safe hub for business energise growth: Alabbar

Emaar Properties, a leading regional property developer and hospitality and mall operator, recorded a net profit surge of 41 per cent in the first half of 2014 compared to the same period in 2013.

Net profits jumped to Dh1.731 billion during the first six months from Dh1.231 in the corresponding 2013 period as revenue reached Dh.063 billion, led by the strong performance of the malls and hospitality business segments, Emaar said in a statement.

In the second quarter, Emaar's net profit rose 28.6 per cent to Dh868 million, marginally beating forecasts as revenue from property sales in Dubai dropped. The outcome beat an average profit forecast of Dh839.8 million for the period.

Emaar's earnings are seen as a key indicator for Dubai's real estate market, which has recovered in the last two years following the effects of the global economic crisis in 2008. Emaar said its malls, retail and hospitality and leisure subsidiaries contributed Dh2.647 billion in recurring revenues during the first six months of 2014, 14 per cent higher than the revenue from these high-performing businesses during the same period last year at Dh2.326 billion.

The malls, retail and hospitality revenues during the second quarter was Dh1.301 billion, 12 per cent higher than the same 2013 quarter revenues of Dh1.160 billion.

Revenues from the company's global operations during rose 15 per cent in the first half to Dh 751 million. This is 43 per cent higher than the international revenues during the first half of 2013. Revenue from international operations during the second quarter jumped 61 per cent to Dh463 million.

Mohamed Alabbar, chairman of Emaar Properties, said Dubai's strong credentials as a stable and safe hub for business and leisure have energised the positive growth of the company.

"His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, has set a strong roadmap of growth for the city's economy, which has boosted investor confidence. The city is today a magnet for talent and capital, and we are complementing this growth through our world-class property, retail and hospitality assets," said Alabbar.

"In the last six months, Emaar has contributed significantly to building Dubai's property infrastructure through the launch of several new projects. We will continue to create iconic lifestyle destinations to support the city as it gears up to host the World Expo 2020 through strategic joint venture partnerships," he said.

The developer said it further strengthened its property portfolio in Dubai with the launch of more than 10 prestigious projects to strong investor response, including international investors. The total value of sales of Emaar's projects in Dubai during the first half was Dh9.032 billion, 43 per cent higher than the previous year's first half.

Investment bank Shuaa Capital said Emaar posted a decent set of numbers with 29 per cent year on year net income growth yet results missed BBG consensus by seven per cent. "We suspect this miss against consensus has been driven by lower-than-expected revenues coupled with some non-operational miss [mainly other income]. However, the overall picture remains healthy and Emaar's story remain compelling as a play on Dubai's overall recovery."

Emaar's results underscored the fact that property business is picking up pace on higher land sales within Dubai Hills/Arabian Ranches and accelerated international deliveries, Shuaa said.

"While we expected some more details on the anticipated Emaar Malls Group IPO, Emaar did not provide information regarding the timeline of the listing which we believe could increase speculation in the coming few weeks," Shuaa analysts said.

The Shuaa analysts said despite a 46 per cent share price rally year-to-date and 15 per cent increase since their last update in June 2014, they continue to see 18 per cent upside potential from current levels and hence maintain "buy" recommendation on the name, "given the solid trajectory and improving visibility on Emaar's rental income and strong momentum in Dubai residential sales."

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Source: Khaleej Times (United Arab Emirates)

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