Dubais Emaar Properties has reported flat profit for the fourth quarter of 2015, as the biggest property developer in the UAE wrote-off losses related to the New Years Eve fire at its Address Downtown Hotel.
Emaar, the developer of the worlds tallest tower, Burj Khalifa, wrote down AED301m ($82m), which affected its quarterly bottom line, halting an earnings boom for the realtor, which had reported growth in net income in the preceding 10 quarters.
Emaar, which is majority-owned by the Dubai government, said that under the accounting rules, it had to recognise the write-off in the year the loss occurred and it can record the payouts from insurance claims as income when they are paid. The hotel is completely insured and the company is confident of recovery of loss from the insurance, Emaar said in a filing to the Dubai Financial Market.
The developer reported a net profit of AED1.034bn for the three months ending 31 December 2015, slightly down from AED1.045bn for the same period in 2014, according to the statement. Emaars fourth-quarter revenue, however, rose to AED3.8bn, up from AED2.4bn a year earlier.
The full-year 2015 net operating profit was AED4.383bn, an 18 per cent year-on-year growth. Revenue for the period reached AED13.661bn, climbing 33 per cent from the AED10.301bn reported at the end of 2014.
The 2015 recurring revenues from the companys shopping malls and retail, and hospitality and leisure businesses rose 8 per cent from a year earlier, to AED5.788bn. Of that, the hospitality and leisure business contributed AED1.677bn, which accounts for 12 per cent of Emaars AED13.66bn total revenues, according to the statement.
Revenue from Emaars international operations increased by 46 per cent to AED2.62bn, compared with AED1.79bn in 2014, which accounted for 19 per cent of total revenue.
Emaar has a footprint across the Middle East, North Africa, South Asia and the US.
The developer, which has a total land bank of about 195 million square meters in Dubai and in international markets, said demand for residential property in the emirate remained strong, with total sales reaching AED10.23bn. The developer did not give comparative figures for total sales in 2014.
The property market in the UAE is softening amid an economic slowdown and waning investor and consumer confidence as oil prices continue to slide. The volumes of sale and property values have slumped in 2015 and analysts predict further declines in 2016.
Sales across various international markets during the same period were valued at AED5.05bn. Emaar Misr, the Cairo-listed subsidiary of the developer, posted a 22 per cent year-on-year sales in 2015 to £E8.644bn ($1.108bn).