April 28 (Bloomberg) -- Emaar Properties PJSC, the builder of the world’s tallest tower, said first-quarter profit rose 44 percent on increased sales of properties in Dubai, delivery of homes in Egypt, and strong revenue from malls and hotels.
Net income climbed to 606 million dirhams ($165 million) or 10 fils a share, from 421 million dirhams, or 7 fils, a year earlier, the Dubai-based company said in an e-mailed statement today. The mean estimate of four analysts was for a profit of 566 million dirhams, according to data compiled by Bloomberg.
Emaar, owner of the world’s largest mall, is increasingly relying on income from hotels and retail as revenue from residential sales declines. The developer plans to add 1 million square feet (92,903 square meters) of space to the Dubai Mall, to boost recurring income.
“We have entered a new era of growth for Emaar, focused on identifying new growth opportunities in line with the fast-changing economic environment,” Chairman Mohammed Alabbar said in the statement. “The expansion that we have announced to the Dubai Mall and our hospitality business are all geared to generate long-term value creation for our stakeholders.”
New unit sales in Dubai rose to more than 620 million dirhams in the first quarter, the company said. Revenue in the three months to March 31 fell 8 percent to 1.82 billion dirhams, with shopping malls and retail businesses contributing 651 million dirhams, and hospitality and leisure businesses contributing 403 million in the first quarter, it said. “The revenues from business segments of malls and hospitality in this quarter increased by 25 percent as compared to the same period in 2011 and accounted for 58 percent of the company’s total revenue,” it said.
Like most of its peers in the United Arab Emirates, Emaar saw earnings drop after Dubai’s property market collapsed at the end of 2008 and caused residential values to drop by 60 percent or more. Revenue from selling properties in the 818-meter (2,684-foot) Burj Khalifa has dwindled as buyers paid their final instalments on completed apartments.
Emaar handed over 158 residential units in the first quarter, comprising 117 units in Dubai and 41 units in international markets, today’s statement said. The company also delivered 180,000 square feet of commercial space in the same period. Emaar said it plans new projects this year to “energize” its domestic operations, according to the statement.
Emaar shares dropped 0.9 percent to 3.25 dirhams on April 26, the last day of trading before the weekend. The stock has gained 26 percent this year, giving the company a market value of 19.8 billion dirhams.
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