Emaar Stock Drops After Profit Misses Estimates: Dubai MoverArif Sharif
Shares of Emaar Properties PJSC, developer of the world’s tallest skyscraper in Dubai, sank for the first time in six days after the company reported second-quarter earnings that missed analysts’ estimates.
The shares fell 1.6 percent, the most since July 23, to close at 9.99 dirhams, helping to drag down Dubai’s DFM General Index 0.9 percent to 4,842.82. The developer reported a 29 percent rise in second-quarter profit to 868 million dirhams ($236 million) after the market closed yesterday, short of the 932 million dirham average estimate of five analysts surveyed by Bloomberg.
“The results disappointed and the share has had a good run in the past days,” Abu Dhabi-based Sebastien Henin, who oversees $90 million as head of asset management at The National Investor, said by e-mail today.
Emaar’s shares have gained almost 9 percent since July 9, when Nakheel PJSC reported strong earnings, on bets it would follow suit. The shares trade at a price-earnings ratio of 21.7, according to data compiled by Bloomberg, and have risen 45 percent this year compared with a 44 percent increase in Dubai’s main share index.
The developer, which plans an initial public offering of shares in its malls unit this year, says it’s focusing on businesses that generate recurring revenue, such as hotels and shopping centers, as a cushion against volatility in Dubai’s property market. The company said March 15 the proceeds of the share sale will be mainly used to pay shareholders a dividend.
Second-quarter revenue fell 9.7 percent from a year earlier to 2.8 billion dirhams, the first drop since the third quarter of 2012. Analysts had expected 2.96 billion dirhams. Recurring revenue from retail and hospitality rose 12 percent to 1.3 billion dirhams in the quarter. The units generated 52 percent of sales in the first half, Emaar said.
Nakheel, developer of the palm shaped islands off Dubai’s coast which is not listed, said last month that first half-profit jumped 54 percent to 1.85 billion dirhams ($504 million) on property sales and improved take-up at its retail and leasing unit.