Emaar Properties records 15% growth in net profit to $377 million in Q1 2017
Emaar Properties PJSC recorded a net profit of AED 1.384 billion (US$ 377 million) in the first quarter (January to March) 2017, an increase of 15 per cent over the same period last year at AED 1.205 billion (US$ 328 million).
Total revenue for Q1 2017 was AED 4.072 billion (US$ 1.109 billion), an increase of 15 per cent over Q1 2016 revenue of AED 3.529 billion (US$ 961 million).
Recurring revenues from the malls, hospitality, entertainment and leisure businesses of Emaar were AED 1.592 billion (US$ 433 million) in Q1 2017 contributing 39 per cent of the total Group revenue.
Emaar’s international operations recorded Q1 2017 revenue of AED 806 million (US$ 219 million), an increase of 62 per cent over Q1 2016 revenue of AED 499 million (US$ 136 million), accounting for 20 per cent of the total Group revenue.
At the Annual General Meeting of Emaar Properties, shareholders have approved to distribute a cash dividend of AED 1.074 billion (US$ 292 million), equivalent to 15 per cent of the share capital.
Focus on value creation
Mohamed Alabbar, Chairman of Emaar Properties, said that the positive results achieved by Emaar across its operations underlines the focus of the company on continued value creation for its stakeholders. “Along with our core business of creating premium real estate in Dubai and other international markets, our malls, hospitality and leisure businesses have also recorded growth. This is driven by our new customer-oriented digital strategy that helps optimise our resource use and enhance efficiency.”
He added: “We have seen an increase in property sales in Dubai, and we are on track with our construction milestones. Emaar’s performance underpins the positive economic environment of Dubai led by the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President & Prime Minister and Ruler of Dubai.”
Strong property sales
Emaar recorded robust property sales of AED 6.049 billion (US$ 1.647 billion) during Q1 2017 in Dubai. This is 44 per cent higher than the value of property sales in Dubai during Q1 2016 at AED 4.194 billion (US$ 1.142 billion), and 115 per cent higher than the figures for Q4 2016 at AED 2.810 billion (US$ 765 million). The Group now has a backlog of AED 46.245 billion (US$ 12.591 billion) to be recognised as revenue in the next few years.
The property business in Dubai was highlighted by new residential launches in Downtown Dubai, Dubai Marina and joint venture projects under Dubai Hills Estate, Dubai Creek Harbour and Emaar South.
Emaar accomplished a key milestone with the completion of the pile foundations for the new global icon The Tower, designed by Santiago Calatrava, in Dubai Creek Harbour. Emaar has also achieved significant construction progress on the projects in Dubai Hills Estate, which now has green avenues, lakes, waterbodies and roads.
The new property launches in Q1 2017 includes Downtown Views II, located in the Zabeel area of Downtown Dubai, Vida Residences in Dubai Marina, Creek Gate and Harbour Gate in Dubai Creek Harbour and Golf Views apartments and Urbana III stacked townhouses in Emaar South.
Expanding malls and hospitality operations During Q1 2017, Emaar Malls (DFM: EMAARMALLS) recorded revenues of AED 836 million (US$ 228 million), similar to Q1 2016 revenue of AED 833 million (US$ 227 million).
Net profit from the malls business during Q1 2017 was AED 539 million (US$ 147 million), similar to Q1 2016 net profit of AED 529 million (US$ 144 million) and 19 per cent higher than Q4 2016 net profit of AED 452 million (US$ 123 million).
The shopping mall assets of Emaar Malls, including its flagship – The Dubai Mall – welcomed over 34 million visitors in Q1 2017, 10 per cent higher than Q1 2016. With a gross leasable area of about 6 million sq ft in Dubai, Emaar Malls is expanding The Dubai Mall’s Fashion Avenue by another 1 million sq ft built-up area this year. Additionally, The Dubai Mall is adding new retail and leisure attractions with the Boulevard, Fountain Views and Zabeel expansions.
Emaar’s hospitality, commercial leasing and entertainment businesses reported revenues of AED 756 million (US$ 206 million) during Q1 2017, an increase of 5 per cent over the same period last year at AED 722 million (US$ 197 million).
Emaar’s hospitality segment marked the launch of two new hotels in Q1 2017 including Address Boulevard, a city lifestyle resort under the portfolio of Address Hotels + Resorts, and Rove Healthcare City. A contemporary midscale brand, Rove Hotels are being developed as a joint venture with Meraas Holding with plans to roll out 10 hotels in Dubai by 2020.
The premium upscale The Address branded hotels under Emaar Hospitality Group recorded an average occupancy of 92 per cent during Q1 2017, higher than the industry average. Emaar is in the course of expanding its hospitality business with 26 upcoming projects in the UAE, Turkey, Egypt, Saudi Arabia and Bahrain.
With 190 million sq m of land bank in the UAE and key international markets, Emaar assets are valued at around AED 179 billion (US$ 49 billion).