Emaar Properties third quarter profit plunges 29% on higher cost

Emaar Properties, Dubai’s biggest listed developer, posted a 29 per cent decline in third-quarter net profit as costs rose and income fell, missing analyst estimates.

Net profit attributable to equity owners fell to Dh1.1 billion in the three months ending September 30, the company said in a statement on Wednesday to the Dubai Financial Market, where its shares are traded. The results missed the Dh1.39bn estimate of two analysts polled by Bloomberg.

“Our commitment to our customers and stakeholders is to create continued value, which reflects in the strong performance of our core businesses,” said Mohmed Alabbar, chairman of Emaar Properties. "We focus on continuously evolving our businesses to meet the aspirations of today’s customers. By investing in digital technology and by innovating new lifestyle environments, we are creating assets that shape the future.”

Revenue fell 5 per cent year-on-year to Dh5.3bn during the period, while gross profit sank 10 per cent to Dh2.75bn. Selling, marketing, general and administrative expenses rose 16 per cent to Dh1.06bn and income tax grew 145 per cent to Dh14.5 million during the period.

Emaar Development, the real estate unit of Emaar, reported a 33.5 per cent decline in third quarter net income attributable to equity holders to Dh681.7m as finance cost rose and revenue dipped.

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Emaar Malls, another unit of Emaar Properties, posted a 10 per cent increase in third quarter net profit to Dh537m. The results missed the median estimates of two analysts polled by Bloomberg who forecast Dh551.5m for the period.

Separately, Nakheel, the developer of Palm Jumeirah, reported a 3.5 per cent drop in net profit for the first nine months of the year to Dh3.86bn.

The company’s year-to-date property handover totalled 588 units, but the company’s focus on expanding its hospitality, retail and leasing divisions continues, it said on Wednesday. Annual revenue from these sectors is now Dh2.6bn – almost 40 per cent of the total – and continues to expand amid the development of new projects.

So far this year, Nakheel has announced contracts worth Dh7bn for a range of infrastructure, residential, retail and hospitality projects.