Emaar Properties PJSC, Dubai’s largest publicly traded developer, said it expects profit to more than triple in the next five years as it hands over completed properties to buyers.
The developer of the world’s tallest tower, Burj Khalifa, expects profit of 3.07 billion dirhams ($836 million) for this year and 3.7 billion dirhams for 2015, Chairman Mohamed Alabbar told shareholders last night. That will rise to 5.82 billion dirhams, 8.1 billion dirhams and 10.1 billion dirhams in the three years through 2018.
Emaar, which is planning to publicly list as much as 25 percent of its retail business, said profit surged 55 percent in the first quarter as demand picked up for homes in Dubai. The company, which has also operations in Egypt, India and Saudi Arabia, has been starting projects in Dubai as the city’s property market recovers from a 2008 crash that saw values plummet by as much as 65 percent.
“The projections for 2014 and 2015 are way too conservative and may be disappointing to some, especially when we take into account contributions from subsidiaries in India, Egypt and Saudi Arabia,” said Mohammed Ali Yasin, managing director of NBAD Securities in Abu Dhabi. “Alabbar is trying to under promise and set the expectations lower in order to surprise on the upside.”
The shares fell as much as 4.1 percent in Dubai trading and were down 1.8 percent at 10:75 dirhams as of 12:30 p.m.. The stock has surged 41 percent this year.
Emaar only accounts for sales after properties are completed and handed over to the buyer, even though it collects payments before and during construction. Alabbar said sales in Egypt climbed 30 percent in the first quarter, even after political turmoil there caused the company to stop work for two months last year. He declined to answer questions about India, where the company operates through its Emaar MGF unit.
Emaar expects to generate 120 billion dirhams of profit in the next 15 to 20 years, the chairman said yesterday. The company’s land bank is around 25 million square meters (269 million square feet,) he said.