Dubai's Emaar Properties, builder of the world's tallest tower, reported 34-percent-drop in third-quarter net profit as the Gulf emirate's property sector suffers, but the developer's retail and leisure business boosted revenues.
The United Arab Emirates' largest developer by market value made a profit of 406 million dirhams ($110.5 million), compared with 612.3 million dirhams during the same period last year, it said in a statement on Dubai's bourse website.
The results beat forecasts from four analysts polled by Reuters who estimated average quarterly profits of 386.5 million dirhams. The developer, whose profits have dropped for the last five quarters, said it made a revenue of 1.86 billion dirhams in the third quarter.
Recurring revenues from the hospitality and shopping malls businesses of Emaar accounted for nearly 41 percent of total revenue in the first nine months of the year, Emaar said in the statement.
"This earnings goes to show that Emaar's hotel and malls portfolio is the main value driver," said Ahmed Badr, head of MENA real estate and construction research at Credit Suisse. Emaar said that it handed a total of 201 residential and commercial units in the third quarter and 712 units in the first nine months of the year.
The Dubai-based firm said in its last quarterly earnings that its income from apartment sales fell by 85 percent. The developer appointed a core management team in the second quarter for a strategic review of its global operations, sources revealed. It is using four of its shopping malls as collateral for a $800 million two-tranche loan, sources said.
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