Emaar Fourth-Quarter Profit Declines 28% as Expenses IncreaseZainab Fattah
Emaar Properties PJSC, the builder of the world’s tallest tower in Dubai, said fourth-quarter profit fell 28 percent as costs jumped. That missed analyst estimates.
Net income dropped to 512 million dirhams ($139 million) from 716 million dirhams a year earlier, the Dubai-based company said in a statement today. That compares with 537.6 million dirhams, the average of five estimates compiled by Bloomberg. Revenue climbed 20 percent to 2.68 billion dirhams. The cost of sales jumped to 1.5 billion dirhams from 970 million dirhams a year earlier, the company said.
Emaar, owner of the world’s largest mall, is increasingly relying on income from hotels and malls and the company will add 1 million square feet (92,903 square meters) of space to the Dubai Mall, to boost recurring income. The developer is said to be considering spinning off its malls unit and Turkish business as it looks for ways to boost shareholder returns, two people briefed on the company’s internal discussions said earlier this month.
Malls and hotels made up 50 percent of 4.1 billion dirhams of revenue in 2012, while international operations contributed 15 percent, or 1.26 billion dirhams, the company said. The developer built homes and offices in countries including Turkey, Lebanon, Saudi Arabia, Egypt and Pakistan.
Emaar completed more than 1,105 homes and 149,000 square feet of commercial office space in Dubai. The company also handed over 673 homes and more than 122,000 square feet of commercial space in its international markets in 2012
The company, which started selling several projects in Dubai including a hotel and serviced apartments, has sold more than 80 percent of the projects offered last year, it said.
The earnings were published after the close of trading in Dubai. The shares dropped 0.2 percent to close at 4.87 dirhams. Emaar has jumped 30 percent this year, giving the company a market value of 29.7 billion dirhams.