Emaar Posts Dh720m Q4 Profit

Emaar Properties, builder of the world’s tallest skyscraper, reported a 130 per cent rise in fourth-quarter profit, thanks to income from major deliveries, high returns from its malls and hotels, and savings from cost management and resource optimisation 
initiatives. Its revenue surged 94 per cent in the fourth quarter year-on-year to Dh2.99 billion. The full-year 2009 revenue stood at Dh8.4 billion, down 21 per cent from last year but net profit rose 98 per cent to Dh327 million. Emaar had posted a loss of Dh2.43 billion in the fourth quarter of 2008. One of Middle East’s largest developers, which opened the 200-storey Burj Khalifa in January, said it would focus this year on middle income housing in emerging markets as a potential growth segment, and hopes to boost income from deliveries due from nearly completed projects abroad and some leftover flows from those 
delivered last year. Chairman of Emaar, Mohamed Alabbar, said that while Dubai will remain an integral part of the Emaar growth story, international markets and new businesses will also make considerable contributions.

“Overseas, Emaar projects in India, Egypt and Saudi Arabia; all reached advanced stages of completion and will be ready for handover 
this year.” Emaar said that recent estimates showed demand for residential property in India will be over 7.5 million units by 2013 of which 85 per cent is projected in the mid and affordable housing segment – a trend observed in Egypt, Pakistan and other emerging markets too. “This year, Emaar will also focus on middle income housing as a strategic growth area to meet the growing demand for homes in emerging markets,” he said in a statement. Indian joint venture Emaar MGF Land Ltd. plans to raise 38.5 billion rupees (Dh2.938 billion) in an initial share offering, and is also on course with the completion of the Commonwealth Games Village 2010, a residential complex set in 27.7 acres in Delhi with an estimated saleable area of 1.8 million square feet. Emaar has made considerable progress with its master-planned communities in India, Syria, Morocco, Jordan, Saudi Arabia and Egypt, with several hundred homes to be handed over 
this year.

Emaar said it handed over keys to 3,100 units last year compared with 4,900 units in 2008. Emaar’s Hospitality and Mall subsidiaries were significant contributors to the company’s revenue stream, with the year witnessing the opening of two new hotels and the grand inauguration of The Dubai Mall, the world’s largest shopping centre, which attracted more than 37 million visitors in its first year of operation. Emaar Healthcare Group, the company’s healthcare subsidiary, opened its first world-class medical centre in Dubai late last year. “During an especially challenging period for economies across the globe, Emaar contributed to the socioeconomic growth and stability of Dubai by creating more than 12,500 new jobs through our subsidiaries. Domestic growth, catalysed by Burj Khalifa, will be the highlight of this year, as Emaar continues to focus on maximising long-term value for our shareholders,” said Alabbar. The developer typically receives installments from buyers as properties are built and gets a final payment 
on delivery.

About 35 per cent 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 Dh4 billion of loans in the next 12 months, Chet Riley, a Dubai-based analyst at Nomura Holdings Inc. 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 per cent owned by Dubai’s government, in December abandoned a planned merger with three real-estate units of Dubai Holding LLC, saying it wouldn’t be economically viable. The move resulted in upgrade of Emaar shares, listed in Dubai Financial Market, by some investment bankers such as Credit Suisse.