Despite dip in Q4, Emaar posts 18% rise in annual profit
- United Arab Emirates: Thursday, January 31 - 2013 at 15:49
Despite recording a loss in Q4, Dubai-based Emaar Properties posted an 18% rise in annual profit in 2012, boosted by strong revenues from its retail and hospitality assets.
Emaar said income from its retail and hospitality businesses represented half of its annual revenues, which rose slightly year-on-year to Dhs8.2bn.
However, a steep rise in costs led to a 28% decline in fourth quarter profits for the company compared to the year-earlier period. The company said its Q4 profit dropped 28% to Dhs512m, as its cost of revenues soared to Dhs1.5bn compared with Dhs970m during the same period in 2011.
The higher costs outweighed a 20% rise in revenue that the company achieved in Q4.
Despite the setback in Q4, Emaar has much to celebrate about 2012, and its stock price is a reflection of that growth as it has nearly doubled over the past 12 month as optimism has returned to Dubai's property market.
"Last year was one of transformation, for Emaar Properties, Dubai and a number of the international markets that we serve," said Mohamed Alabbar, Chairman of Emaar Properties. "With Dubai restating its credentials as a global business and tourism hub, Emaar capitalised on the city's resurgence by investing in creating prime real estate assets and strengthening our shopping malls and hospitality businesses."
The company said revenue from its shopping malls and retail business rose 27% in 2012 to Dhs2.7bn, led by the strong growth in visitor footfall to The Dubai Mall, Emaar's flagship development, which welcomed over 60 million visitors in 2012 - a growth of over 11% compared to 2011.
Revenues from its hospitality and leisure business stood at Dhs1.4bn, up 13% compared to 2011. The Address Hotels + Resorts recorded an average annual occupancy of 85% in 2012, and the chain strengthened its international footprint with management contracts to operate luxury resorts in Egypt and Kenya.
Emaar handed over 1,105 homes and more than 149,000 square feet of commercial office space in Dubai last year, along with over 673 homes and more than 122,000 square feet of commercial space in its international markets.
Among the projects launched last year included Panorama at The Views, The Address The BLVD in Downtown Dubai, and luxury villas and town houses in Arabian Ranches. More than 80% of the projects launched last year have been sold, the company said.
Among the key international projects launched by Emaar last was Emaar Square in Turkey, which will feature over 1,000 luxury homes, a 180-room five-star hotel, offices, and a world-class shopping mall, the largest in the country. Emaar also launched the 'city within a city' development, Emaar Square, at its flagship Uptown Cairo development in Egypt.
"With total assets of over Dhs61.2bn ($16.7bn) as at 30 September 2012, Emaar has an impressive land bank of more than 234 million sq m in international markets, and over 11.19 million sq m in current gross construction area in the UAE," the company said.
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