Emaar reports 14% net profit growth in Q2 on strong international revenues

Dubai developer Emaar Properties recorded a 14 per cent rise in Q2 net profit to reach Dhs1.45bn, compared to Dhs1.27bn in the second quarter of 2016, it announced on Monday.

The company also revealed that net profit during the first half of the year rose by 15 per cent to Dhs2.8bn, compared to Dhs2.47bn during the same period last year.

Meanwhile, revenues during the second quarter reached Dhs3.79bn, up 2 per cent year-on-year. In H1, total revenues increased by 8 per cent year-on-year to reach Dhs7.86bn.

Emaar said it is distributing a cash dividend of 15 per cent of the share capital, equivalent to Dhs1.074bn.

The developer attributed the rise in net profit and revenues to strong growth in its international developments.

Emaar’s revenue from international development grew 64 per cent in H1 2017 to Dhs1.69bn, boosted by projects in markets such as Egypt, Turkey, India and Saudi Arabia.

International development now contributes 22 per cent to the total group revenue, a statement said.

However, the developer also recorded a 22 per cent rise in property sales in Dubai during the first half of the year to reach Dhs10.81bn.

Strong sales were recorded for the residential launches in Emaar’s flagship projects including Dubai Creek Harbour, Downtown Dubai, Dubai Hills Estate and Emaar South.

New project launches in the first six months of the year included: Downtown Views II and Vida Dubai Mall in Downtown Dubai, Vida Residences in Dubai Marina, Creek Gate, Harbour Gate and Creek Rise in Dubai Creek Harbour, Park Heights I & II and Maple 3 in Dubai Hills Estate and Golf Views apartments and Urbana III stacked townhouses in Emaar South.

Emaar now has a total backlog of Dhs49.5bn – including a backlog of over Dhs40bn in Dubai – to be recognised in the next few years, it added.

The company also saw growth in recurring revenues from its shopping malls and retail, hospitality and leisure, commercial leasing and entertainment businesses – which reached Dhs3.01bn in H1, representing 38 per cent of the total revenue.

Emaar Malls – which operates Dubai Mall – reported net profit of Dhs1.02bn in H1 – up 3 per cent year-on-year, while revenues during the period remained flat at Dhs1.62bn.

The company’s shopping malls saw over 65 million visitors in the first half of 2017, an increase of 7 per cent over H1 2016.

Emaar Malls also acquired a 51 per cent stake in online fashion retailer Namshi in the second quarter.

Meanwhile the hospitality and leisure, commercial leasing and entertainment businesses of Emaar recorded H1 2017 revenues of Dhs1.39bn – up 7 per cent year-on-year.

Emaar opened three hospitality projects between January to June this year including Address Boulevard in Downtown Dubai, Rove Healthcare City and Rove Trade Centre.

Occupancy levels at Address Hotel + Resorts were 82 per cent, it said.

The hospitality business has also expanded its geographic footprint with management agreements to operate hotels in Saudi Arabia, Bahrain, Egypt and Turkey.

Currently, the group has over 27 upcoming projects in the pipeline in the UAE and in international markets.

Looking ahead, Emaar has announced its plan to list its UAE real estate development business through up to 30 per cent share offering on the Dubai Financial Market (DFM).

The funds raised through the sale of equity will be primarily distributed as dividends to shareholders.

Emaar has a land bank of about 188 million sq m in the UAE and key international markets.

Mohamed Alabbar, chairman of Emaar Properties, said: “Organisation-wide, we are marking a transformational change to strengthen project management and service excellence led by digital technology.

“At every stage of development, we place emphasis on being more efficient and responsive to the aspirations of our customers, and to create long-term value for our stakeholders.”