Dubai’s Emaar Properties, builder of the world’s tallest tower, shrugged off a weakening local market to report a 17 per cent increase in first-quarter net profit on Sunday as sales rose and its hospitality and retail units also prospered.
The developer, in which Dubai’s government owns a minority stake, made a net profit of Dhs 1.21bn ($330m) in the three months to March 31, it said in a statement. That compares with a profit of Dhs 1.03bn in the year-earlier period.
SICO Bahrain forecast Emaar’s first-quarter profit would be Dhs 1.22bn.
Emaar’s chairman last month said he had been “really scared” of market conditions coming into 2016, but these fears may have been allayed by a 70 per cent rise the value of Emaar’s first-quarter property sales to Dhs 4.19bn.
That increase was achieved despite the emirate’s property prices in steady decline from a 2014 peak and with industry experts forecasting further drops this year.
Emaar’s property unit generated Dhs 1.97bn in first-quarter revenue, up 32 per cent on a year ago. The company does not book immediately book property sales as revenue; it is steadily included in line with construction.
Emaar Malls, majority-owned by Emaar, last week reported a 22 per cent rise in first-quarter net profit to Dhs 529m.
Its hospitality, commercial leasing and entertainment unit, which includes its hotel assets, generated quarterly revenue of Dhs 722m, Emaar said. It did not provide a year earlier figure, but said its Address-branded hotels achieved 93 per cent occupancy. This figure excludes Address Downtown hotel, which was ravaged by fire on New Year’s Eve.
An Emaar executive last week said this hotel would not re-open this year, while the company in its 2016 earnings took a Dhs 301m writedown relating to the blaze.
Emaar’s first-quarter revenue was Dhs 3.53bn, also up 17 per cent from a year earlier.