Emaar Properties assigned A- and A3 ratings

According to Standard & Poor's, the A- rating for the company benefits from "Emaar's important role and strong market position" in the fast-growing Dubai property development market and close relationship with the Dubai government. The rating also gains from the group's strong cash flows, low debt leverage and strong asset base.

Moody's, in its first-ever listing of Emaar, said the company's A3 ratings reflect the group's intrinsic credit strength and the additional enhancement that can be derived from the financial strength of Dubai. The A3 rating highlights Emaar's leading position in the Dubai residential market, strong financial profile and conservative risk-management policy as well as institutional support.

"The A- rating of Emaar by Standard & Poor's and A3 rating by Moody's underscore the strong economic fundamentals of the company and will power our regional and international expansion plans in line with our Vision 2010 to become one of the most valuable companies in the world," said Mr Mohamed Ali Alabbar, Chairman, Emaar Properties. "The stable outlook of the company's prospects and corporate credit rating will enable us to deliver greater value to our shareholders guided by our two-pronged growth approach of geographic expansion and business segmentation."

Citing the performance of Emaar, Standard & Poor's stated: "Operating margins are very high supported by the strong demand. The group focuses on residential communities and benefits from high demand for properties in Dubai."

Emaar is expected to maintain a modest financial risk profile and continued strong cash flow credit measures, according to Standard & Poor's. The company is also projected to have adequate liquidity resources and the group's use of progressive payments will benefit its cash position.

"The stable outlook also reflects the expectations that Emaar will continue to play an important role in the real estate development in Dubai," the report said. Emaar is also expected to increase cash flows from international operations and rental income from the group's investment property portfolio.

Moody's ratings factor in Emaar's conservative capital structure, thus resulting in robust interest cover and strong liquidity. "The group's credit quality is also supported by its conservative risk-control guidelines aimed at ensuring that the amount of speculative development remains limited. Emaar's business model benefits from a fairly high level of direct or indirect institutional support both in Dubai and abroad, given its important role in host governments' and local authorities' strategies to develop a high-quality residential property supply," the report stated.

Emaar gained record net profits of AED 6.371 billion (US$1.735 billion) and annual revenue of AED 14.006 billion (US$3.813 billion) in 2006, a growth of 35 per cent and 68 per cent respectively over the previous year. The company also posted a net profit of AED 1.721 billion (US$0.469 billion) for the first quarter of 2007 and revenue of AED 3.904 billion (US$1.063 billion).

Backed by strong acquisitions and joint ventures, Emaar today has expanded into 16 global markets including the US and the UK and emerging markets in the Middle East and North Africa, the Indian Subcontinent and South Asia. The company has diversified into education, healthcare, finance, malls, industry and hospitality & leisure.

Emaar recently debuted on the FT Global 500 ranking, issued by the Financial Times daily. Emaar is only one of ten real estate companies in the world and the only property developer from the Middle East and North Africa region and Indian Subcontinent to be ranked in the list.