Dubai-based developer Emaar Properties reported profits of AED760m ($207m) in the first quarter of 2010, 152 per cent higher than the AED302m recorded in the same period last year, as a result of more handovers and a strong performance from Emaar’s hospitality and mall divisions.
“The past quarter saw the first full operational quarter of Emaar’s five Address Hotels in Dubai, with the 444-room Address Marina Mall coming on stream in the middle of the fourth quarter of 2009,” says Roy Cherry, senior vice-president of research for real estate and construction at Shuaa Capital.
Meanwhile, Emaar’s Dubai Mall hosted more than five million visitors during the month-long Dubai Shopping Festival, which began on 28 January, with weekly visitor footfall growing 30 per cent during the festival as compared with the previous month.
The AED760m profit represented a 5.6 per cent increase from the previous quarter and exceeded Shuaa Capital’s estimate of AED640.4m by 19 per cent.
“We were more conservative in our forecasting because we expected fewer handovers in this quarter,” says Cherry.
Emaar also recorded a revenue of AED2.9bn in the first three months of the year, a 87 per cent increase from the AED1.5bn achieved in the corresponding months of 2009.
Unlike the first and fourth quarters of 2009, Emaar did not book any impairments or provisions during the first three months of 2010. Excluding provisions and write-offs, the company’s first-quarter results have increased by 152 per cent year-on-year, but have fallen by 18 per cent compared with the previous quarter.
Mohamed Alabbar, Emaar’s chairman, says that the company’s strategy for 2010 is to focus on the larger Middle East, North Africa and South Asia region.
“Our strategy is to develop integrated lifestyle communities in these markets that meet the growing demand for affordable luxury,” says Alabbar.
Shuaa Capital expects Emaar’s operating properties to achieve a profit of about AED2bn in 2010.