Emaar posts Q4 profit

11. February. 2010

Emaar, the UAE’s largest real estate developer, was able to beat Q4 estimates as revenues from its malls and hotels business grew.

The builder of the world’s tallest skyscraper in Dubai, reported a fourth quarter profit of $196m. The loss in the year earlier period was AED2.43bn ($662m), Emaar said in a statement to the Dubai bourse today.

The developer, which opened the 200-story Burj Khalifa in January, is focusing on overseas operations after property prices in its home market fell by more than 50 percent. Indian joint venture Emaar MGF Land Ltd. plans to raise 38.5 billion rupees ($800 million) in an initial share offering, Emaar Chairman Mohammed Alabbar said in November.
 
Earnings probably improved on “significant delivery of units in Dubai Marina and Downtown and improving return from Emaar’s Malls and hotels,” Shuaa Capital analyst Roy Cherry said in a phone interview before earnings were released.
 
Emaar handed over keys to 3,100 units last year compared with 4,900 units in 2008, according to the statement.

The developer typically receives installments from buyers as properties are built and gets a final payment on delivery. About 35 percent of revenue from Burj Khalifa will be included in this year’s results as the building’s units are handed over, Alabbar said. Buyers in the tower have paid off about 85 percent of their units’ value, the chairman said in January.

Emaar may need to refinance about 4 billion dirhams of loans in the next 12 months, Chet Riley, a Dubai-based analyst at Nomura Holdings said.

Revenue from Burj Khalifa, combined with income from its investments in malls and other properties, will help the liquidity, he said.

The company, 31 percent owned by Dubai’s government, in December abandoned a planned merger with three real-estate units of Dubai Holding, saying it wouldn’t be economically viable.
[ArabianBusiness]