Emaar’s profit 2% higher after factoring in unit minority interest

Emaar Properties, Dubai’s biggest listed developer, posted a 2 per cent year-on-year rise in second-quarter net profit after accounting for minority interest following its unit Emaar Development’s public offering last year.

Net profit for the three months ended June 30 rose to Dh1.48 billion, the company said yesterday. Net income excluding tminority interest climbed 16 per cent to Dh1.68bn. Revenue grew 55 per cent year-on-year to Dh5.88bn during the same period.

Second-quarter profit was marginally below the Dh1.49bn median forecast of two analysts polled by Bloomberg.

“While our property business recorded positive growth with several new residential destinations launched in Dubai, our malls, hospitality, leisure and entertainment business benefited from the increase in tourist arrivals and boost in domestic spending,” said Emaar chairman Mohamed Alabbar.

Emaar Development, the real estate development arm of Emaar, raised Dh4.82bn from its initial public offering in November – the biggest listing since 2014 and the third-largest IPO yet on a Dubai exchange.

“Better-than-expected performance from the property development segment made up for the weaker-thanforecast performance from the mall retail and hospitality segments,” said Ayub Ansari, an analyst with Sico Bahrain.

“The standout performance was from Emaar’s 79 per cent- owned subsidiary Emaar Development, which reported a 73 per cent year-on-year growth in profitability, boosted by accelerated revenue recognition from properties

IN NUMBERS Dh1.48bn 55% Net quarterly profit made by Emaar Properties Year-on-year revenue growth recorded over the same period

under development.” Sico is forecasting Emaar’s full-year net profit will rise 7 per cent to Dh6bn for this year.

Emaar Development reported a 73 per cent year-on-year jump in second-quarter net income to Dh997m, beating analysts’ forecasts, as “strong” demand for its residential projects boosted revenues.

Emaar Malls, the retail unit of Emaar Properties, posted a 15 per cent increase in second-quarter net income, although quarterly footfall was little changed.

Meanwhile, Dubai real estate developer Union Properties swung to a second-quarter net profit from a year-earlier loss as costs fell and gains on fair valuations of investment properties boosted income.

Net profit attributable to the company’s shareholders for the three months ending June 30 reached Dh24.7m compared with a Dh2.29bn loss a year earlier, the company said in a statement to the Dubai Financial Market, where its shares are listed.

Gains on valuations of properties in the second quarter rose to Dh120.67m from a valuation loss of Dh2.1bn a year earlier. Direct costs fell 70 per cent to Dh93.1m from a year earlier.

Other income for the developer surged to Dh65.4m at the end of June from Dh4.1m reported for the same period in 2017.

Union Properties’ share of income from associates and joint venture also more than doubled to Dh21.4m at the end of second quarter this year from Dh8.8m a year earlier.

Union Properties, which restructured its board in May last year, has struggled to maintain profitability amid sliding real estate prices in the UAE.

The company is looking to diversify income streams, expand its footprint outside its home market and enter new business lines to boost revenues.