Dubai’s Emaar Properties Q2 net profit up 8%

Dubai’s Emaar Properties, builder of the world’s tallest tower, reported an 8 per cent rise in second-quarter net profit on Sunday as revenue advanced.

The developer, in which Dubai’s government owns a minority stake, made a net profit of Dhs 1.27bn ($345.8m) in the three months to June 30, it said in a statement.

That compares with a profit of Dhs 1.18bn in the year-earlier period.

SICO Bahrain forecast Emaar would make a quarterly profit of Dhs 1.06bn.

Emaar’s quarterly revenue was Dhs 3.73bn, up from Dhs 3.5bn a year earlier, which the company attributed to “the achievement of new milestones that contributed to higher revenue recognition”, without elaborating.

The firm’s shopping malls and hospitality businesses generated revenue of Dhs 1.36bn in the three months to June 30, with its international operations making Dhs 533m.

It did not provide a comparative figure or context versus the same quarter of 2015, but said in the statement that revenue from the retail business in the first half of 2016 was flat to the corresponding period of last year and came despite the absence of The Address Downtown Dubai from its earnings.

The luxury hotel and residential tower, situated opposite the Burj Khalifa, was ravaged by a huge fire on New Year’s Eve, which police later said was caused by an electrical short circuit. The hotel is unlikely to reopen in 2016, Emaar said in April.

Read more: Electrical short circuit caused Address hotel fire – Dubai police

Emaar’s net profit in the first half of 2016 was Dhs 2.48bn, 12 per cent higher than the same six months of last year.

Total property sales worth Dhs 10.44bn were made in the opening six months of the year, up 23 per cent over the corresponding period of 2015. Sales in Dubai jumped 45 per cent to Dhs 8.85bn.

The Dubai real estate sector has softened since late-2014 after a three-year boom fed by inflows of cash from politically unstable Arab nations.

The chairman of Emaar Properties, Mohamed Alabbar, admitted in April that he was “really scared” of market conditions coming into 2016 and the firm had undertaken severe cost cutting to help meet the challenges.