Emaar Properties, the largest developer in the region, has reported earnings that are worse than expected after booking Dh417 million (US$113.5m) in provisions for the fourth quarter of last year.
Fourth-quarter profits fell by 62 per cent to Dh274m compared with the same period in 2009 after two partly owned companies wrote down the value of their assets and costs rose.
The company more than doubled provisions compared with the same period in 2009, after Amlak Finance and Dubai Bank, both affiliated companies, wrote down the value of their assets, an Emaar spokesman said.
"The provisions primarily relate to provisions made by both these entities in respect of their assets," the spokesman said.
Amlak, which was once the largest lender to homebuyers in the UAE but stopped issuing loans two years ago, had until now refused to revalue almost Dh4 billion of property investments and advance payments on unfinished developments. Emaar owns a 66 per cent stake in the company.
Emaar was also dealing with the rising cost of doing business, an income statement published yesterday shows. While its revenues increased by 28 per cent to Dh3.8bn in the final three months of last year from Dh2.98bn in the same period in 2009, its cost of sales rose by 69 per cent to Dh2.6bn.
Chet Riley, an analyst at Nomura Securities, said Emaar was probably facing a combination of holding costs for undelivered units in its projects and increased operating costs. Even more writedowns were likely to come in the first part of this year.
"We look at this as impair in 2010 and repair in 2011," Mr Riley said. "Especially if you consider that most of their revenue came out of Dubai, this is a fairly good result."
Emaar has emerged as one of the healthiest property developers in the UAE because of its strong recurring revenues from retail, hotels and malls. About a quarter of its revenues last year were from these three categories, the company said.
"In a year that was marked by cautious optimism, timely delivery of property and consolidation of core businesses, Emaar Properties took bold initiatives that have a far-reaching potential in driving sustained returns for our stakeholders," said Mohamed Alabbar, the chairman of Emaar.
It reported net profits of Dh2.4bn for last year, compared with Dh327m in 2009 when it wrote off huge investments in a US property company, John Laing Homes.
Emaar has also been raising new finance in recent months, with the issuance of a convertible bond worth $500m in September and a $500m sukuk last month.
"Both offerings were the first by a corporate entity out of the region post the global financial crisis and received overwhelming response from the investors," it said.
The new funds have been used in large part to convert short-term debt to debt with a longer maturity.
bhope@thenational.ae
Company%20Profile
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UAE%20athletes%20heading%20to%20Paris%202024
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The Sand Castle
Director: Matty Brown
Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea
Rating: 2.5/5
The specs
Engine: Four electric motors, one at each wheel
Power: 579hp
Torque: 859Nm
Transmission: Single-speed automatic
Price: From Dh825,900
On sale: Now
Vidaamuyarchi
Director: Magizh Thirumeni
Stars: Ajith Kumar, Arjun Sarja, Trisha Krishnan, Regina Cassandra
Rating: 4/5
TWISTERS
Director: Lee Isaac Chung
Starring: Glen Powell, Daisy Edgar-Jones, Anthony Ramos
Rating: 2.5/5
The%20specs%3A%202024%20Mercedes%20E200
%3Cp%3E%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3E2.0-litre%20four-cyl%20turbo%20%2B%20mild%20hybrid%0D%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E204hp%20at%205%2C800rpm%20%2B23hp%20hybrid%20boost%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E320Nm%20at%201%2C800rpm%20%2B205Nm%20hybrid%20boost%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3E9-speed%20auto%0D%3Cbr%3E%3Cstrong%3EFuel%20consumption%3A%20%3C%2Fstrong%3E7.3L%2F100km%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3ENovember%2FDecember%0D%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh205%2C000%20(estimate)%3C%2Fp%3E%0A
COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
The biog
Family: wife, four children, 11 grandchildren, 16 great-grandchildren
Reads: Newspapers, historical, religious books and biographies
Education: High school in Thatta, a city now in Pakistan
Regrets: Not completing college in Karachi when universities were shut down following protests by freedom fighters for the British to quit India
Happiness: Work on creative ideas, you will also need ideals to make people happy
The Penguin
Starring: Colin Farrell, Cristin Milioti, Rhenzy Feliz
Creator: Lauren LeFranc
Rating: 4/5
JOKE'S%20ON%20YOU
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COMPANY%20PROFILE
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COMPANY PROFILE
Name: Qyubic
Started: October 2023
Founder: Namrata Raina
Based: Dubai
Sector: E-commerce
Current number of staff: 10
Investment stage: Pre-seed
Initial investment: Undisclosed
Mohammed bin Zayed Majlis
If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.
When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.
How to get there: Emirates currently flies from Dubai to Orlando five times a week.
TO A LAND UNKNOWN
Director: Mahdi Fleifel
Starring: Mahmoud Bakri, Aram Sabbah, Mohammad Alsurafa
Rating: 4.5/5
Other workplace saving schemes
- The UAE government announced a retirement savings plan for private and free zone sector employees in 2023.
- Dubai’s savings retirement scheme for foreign employees working in the emirate’s government and public sector came into effect in 2022.
- National Bonds unveiled a Golden Pension Scheme in 2022 to help private-sector foreign employees with their financial planning.
- In April 2021, Hayah Insurance unveiled a workplace savings plan to help UAE employees save for their retirement.
- Lunate, an Abu Dhabi-based investment manager, has launched a fund that will allow UAE private companies to offer employees investment returns on end-of-service benefits.
Squid Game season two
Director: Hwang Dong-hyuk
Stars: Lee Jung-jae, Wi Ha-joon and Lee Byung-hun
Rating: 4.5/5
About Housecall
Date started: July 2020
Founders: Omar and Humaid Alzaabi
Based: Abu Dhabi
Sector: HealthTech
# of staff: 10
Funding to date: Self-funded
Five%20calorie-packed%20Ramadan%20drinks
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COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
Villains
Queens of the Stone Age
Matador
The five pillars of Islam
THE LIGHT
Director: Tom Tykwer
Starring: Tala Al Deen, Nicolette Krebitz, Lars Eidinger
Rating: 3/5