Emaar Properties reported a 20 per cent rise in first-quarter net income, as revenue climbed on higher contributions from its shopping malls and hospitality businesses.
The UAE’s biggest-listed developer's net profit for the three months ending March 30 – excluding the impact of the listing of its real estate unit Emaar Development’s – climbed to Dh1.66 billion, from the same period a year earlier, Emaar said on Tuesday in a filing to the Dubai Financial Market, where its shares are traded.
Quarterly income advanced 8.5 per cent to Dh1.5bn, subsequent to accounting for the impact of the IPO, the company said.
Bahrain’s Sico had estimated Emaar's three-month net income at Dh1.37bn.
Emaar Development, which follows a build-to-sell business model, floated its shares on DFM in the fourth quarter of 2017 in the largest listing on the bourse since 2014. Emaar Properties distributed a total cash dividend of Dh4bn from the proceeds of the share float in two tranches to the company’s shareholders, the developer said.
“Our strategy to build long-term value for our shareholders is to … continue to drive the success of our hospitality, malls, leisure and entertainment businesses,” Mohamed Alabbar, the chairman of Emaar Properties, said. “We are a customer-first company, and we focus on rapid construction and project delivery.”
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Revenue for the first three months of 2018 came in at Dh5.59bn, a 37 per cent rise from Dh4.07bn recorded for the first quarter of 2017. It was 2.4 per cent above the average estimates of analysts polled by Bloomberg. “Significant progress achieved on projects under construction” was among the factors that supported the revenue surge, it said.
The company's shares on Tuesday ended trade 1.72 per cent lower in a broadly lacklustre trading. Dubai's benchmark DFM General Index retreated 1.15 per cent.
"Emaar’s first quarter earnings were solid. The company has strong fundamentals and cheap valuations and its financial performance was what is expected from a company like Emaar," said Tariq Qaqish, managing director of asset management at Dubai-based financial services firm Menacorp.
"The market, however, is generally weak, hammered by negative sentiment, which is holding back stocks with good growth stories.”
Emaar’s 2017 full-year net profit rose 9 per cent to Dh5.7bn, but it registered a 16 per cent year-on-year drop in fourth-quarter net income, to Dh1.35bn. It did not provide a reason for the drop at the time.
In March, Emaar and Abu Dhabi’s biggest listed developer, Aldar properties, entered a joint venture to develop Dh30bn worth of projects pipeline with an initial focus on two developments in Abu Dhabi and Dubai.
Emaar has launched various schemes this year in Dubai Creek Harbour, Downtown Dubai, Dubai Hills Estate, Emaar South, Emaar Beachfront, Arabian Ranches and Dubai Marina.
The company said it would waive property registration fees and offer special payment plans for the commercial and residential schemes it was marketing at the inaugural Dubai Property Festival sales expo in April, for the duration of the show.