http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aY1_B0wQ151U
By Arif Sharif and Zahra Hankir
May 15 (Bloomberg) -- Emaar Properties PJSC, the United Arab Emirates’ biggest developer by market value, said revenue from apartment sales declined 81 percent in the first quarter and from villa sales 50 percent amid weak property demand.
Income from apartment sales dropped to 375 million dirhams ($102 million) and from villas to 60 million dirhams, according to Emaar’s earnings statement posted on the Dubai Financial Market today. Overall revenue fell 31 percent to 1.98 billion dirhams in the first quarter, while profit slumped 45 percent. Emaar reported first-quarter earnings on April 24 and provided a breakdown of revenue today.
Emaar will need to "start relying more on international projects" to compensate for a decline in apartment deliveries in Dubai, said Majed Azzam, a Dubai-based analyst at AlembicHC Securities. Prices and margins are lower in international markets and Emaar’s earnings will be "hit this year, until the company resumes sales in Dubai," he said today.
The company, the developer of the world’s tallest tower in Dubai, was hurt by a more than 60 percent slump in property prices in its home market as speculative demand waned and banks tightened lending since mid-2008. Emaar’s sales in the U.A.E. contributed 79 percent of revenue in the first quarter compared with 96 percent a year earlier, according to today’s statement.
Emaar’s shares fell as much as 1.9 percent to 3.16 dirhams and were trading 1.2 percent lower at 11:55 a.m. in Dubai today. The stock has dropped 10.4 percent this year compared with a 2.6 drop in the Dubai Financial Market General Index.
Land sales
The company’s sales of commercial units and land plots rose 16-fold to 704 million dirhams, while revenue from the hospitality business advanced 41 percent to 335.8 million dirhams, according to the statement. Rental income from leased properties like shopping malls gained 8.5 percent to 507.5 million dirhams.
Emaar said on April 24 its first-quarter profit of 421 million dirhams was driven by hotels and malls as well as the handover of about 270 apartments in Burj Khalifa, the world’s tallest tower, and Boulevard Plaza. That missed the average estimate of six analysts for a profit of 567 million dirhams.
House prices in the U.A.E. may drop an additional 25 percent to 30 percent as population growth stagnates and more properties are put onto the market, according to a report by Dubai-based Rasmala Investment Bank Ltd. in March. Emaar said on May 7 it formed a team of senior managers and external consultants to develop a five-year action plan for the company.
By Arif Sharif and Zahra Hankir
May 15 (Bloomberg) -- Emaar Properties PJSC, the United Arab Emirates’ biggest developer by market value, said revenue from apartment sales declined 81 percent in the first quarter and from villa sales 50 percent amid weak property demand.
Income from apartment sales dropped to 375 million dirhams ($102 million) and from villas to 60 million dirhams, according to Emaar’s earnings statement posted on the Dubai Financial Market today. Overall revenue fell 31 percent to 1.98 billion dirhams in the first quarter, while profit slumped 45 percent. Emaar reported first-quarter earnings on April 24 and provided a breakdown of revenue today.
Emaar will need to "start relying more on international projects" to compensate for a decline in apartment deliveries in Dubai, said Majed Azzam, a Dubai-based analyst at AlembicHC Securities. Prices and margins are lower in international markets and Emaar’s earnings will be "hit this year, until the company resumes sales in Dubai," he said today.
The company, the developer of the world’s tallest tower in Dubai, was hurt by a more than 60 percent slump in property prices in its home market as speculative demand waned and banks tightened lending since mid-2008. Emaar’s sales in the U.A.E. contributed 79 percent of revenue in the first quarter compared with 96 percent a year earlier, according to today’s statement.
Emaar’s shares fell as much as 1.9 percent to 3.16 dirhams and were trading 1.2 percent lower at 11:55 a.m. in Dubai today. The stock has dropped 10.4 percent this year compared with a 2.6 drop in the Dubai Financial Market General Index.
Land sales
The company’s sales of commercial units and land plots rose 16-fold to 704 million dirhams, while revenue from the hospitality business advanced 41 percent to 335.8 million dirhams, according to the statement. Rental income from leased properties like shopping malls gained 8.5 percent to 507.5 million dirhams.
Emaar said on April 24 its first-quarter profit of 421 million dirhams was driven by hotels and malls as well as the handover of about 270 apartments in Burj Khalifa, the world’s tallest tower, and Boulevard Plaza. That missed the average estimate of six analysts for a profit of 567 million dirhams.
House prices in the U.A.E. may drop an additional 25 percent to 30 percent as population growth stagnates and more properties are put onto the market, according to a report by Dubai-based Rasmala Investment Bank Ltd. in March. Emaar said on May 7 it formed a team of senior managers and external consultants to develop a five-year action plan for the company.
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