Emaar Properties, the UAE's largest real estate developer that built Dubai's Burj Khalifa, posted a 32 per cent increase in third quarter net profit on Sunday, beating analysts' forecasts, thanks to an uptick in Dubai residential property sales.
Net profit for the three months ending September 30 reached Dh1.51 billion compared with Dh1.14bn for the same period last year, the company said in a statement.
Bahrain-based investment bank Sico had forecast a third quarter net profit of Dh1.36bn, according to a Reuters poll.
A Bloomberg survey quoted an analyst forecasting a third quarter net profit of Dh1.25bn.
The company's profit beat expectations "largely due to stronge-than-expected performance of the UAE property development business," said Ayub Ansari, a senior analyst at Sico. "Revenues from Emaar's hospitality and lease segment business were largely in line."
For the full year, Sico is projecting an 11 per cent increase in earnings to Dh5.8bn.
Third quarter revenue for the company surged 45 per cent to Dh5.58bn from Dh3.84bn.
Nine-month sales of residential property in Dubai hit Dh15.36bn, 32 per cent higher than a year earlier. Emaar now has a domestic sale backlog of Dh40.8bn, and an expected net cash flow of Dh18bn, the company said.
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“The impressive growth in sales of our Dubai residential property launches this year puts us in a strong position to generate strong cash flows for the company of the coming years,” said Mohamed Alabbar, chairman of Emaar Properties.
“The sustained demand for projects in Dubai is a strong indicator of the investor trust in Dubai, which is today one of the fastest-growing hubs for business and leisure.”
Emaar Development, the company's real estate development business currently undergoing an IPO process, posted a 32 per cent rise in nine-month net profit to Dh2.1bn from a year earlie, with itsnine-month revenue soaring 48 per cent to Dh6.5bn.
Emaar is selling a 20 per cent stake in the subsidiary, which is expected to raise as much as Dh5.52 billion ($1.5bn), with shares due to list on the Dubai Financial Market. It will be Emaar's third subsidiary-listing after Emaar Malls in Dubai and Emaar Misr, its Egyptian unit in Cairo.
“The partial listing of Emaar Development and the proposed special dividends to be distributed from its proceeds highlight the continued value that we bring to our shareholders,” Mr Alabbar said.
Emaar’s shopping malls, hospitality and leisure businesses recorded flat revenue of Dh4.44bn in the first nine months of this year.
Revenue from the International property development unit rose 51 per cent to Dh2.55bn from Dh1.69bn, representing 19 per cent of total revenue.
Emaar’s total property sales including international operations in the first nine months this year stood at Dh17.63bn, with a total backlog of Dh50.54bn.
The company, which has delivered over 34,500 residential units in Dubai since 2002, has sold around 80 per cent of over 24,000 units currenlty under construction across eight projects.
Earlier this month, Emaar Malls, the retail business majority-owned by Emaar Properties that operates Dubai Mall, posted an 11 per cent increase in third quarter net profit to Dh485 million, beating an analyst's forecast. The company benefited from its $151m acquisition of a 51 per cent stake in online retailer Namshi.
Emaar Properties shares rose 1.03 per cent to Dh7.88 in Dubai ahead of Sunday's earnings announcement.