Emaar's decision to pay a 10 per cent dividend yesterday was not well received by the market.
However, combined with fourth-quarter results that were better than many analysts expected, the Dubai developer should not be written off by investors.
Emaar, the UAE's biggest developer by market value, announced it will pay a 10 per cent - 10 fils - dividend on its stock for the year ending December 31. Its share price promptly fell to close the day 2.6 per cent lower at Dh2.97.
Despite the cool reception, analysts looking at the company's underlying results say the fundamentals are strong.
Emaar reported revenue of Dh8.1 billion, 33 per cent lower than a year before. This was marginally lower than consensus forecasts of Dh8.2bn, but in line with expectations at several brokerages.
Full-year profits were boosted by a strong fourth quarter and stood at Dh1.79bn, down 27 per cent on the year before, but beating consensus expectations of about Dh1.6bn. Emaar remains JPMorgan's preferred property stock for the Middle East and North Africa.
In a positive nod to future prospects at Emaar, Beltone analysts note a key highlight of the results is Emaar's lessening exposure to Dubai property, and its increasing presence in local retail and hospitality, as well as international markets. However, Nick Smith, the managing director at the consultancy EC Harris, said the Dubai property market was improving.
"There seems to be more projects starting again and more funding available again in Dubai. Emaar is well placed to take advantage of that. It has a really good track record of delivery for projects."
Analysts at NBK labelled Emaar's full-year results "strong", but raised concern over the gross margins, saying they seemed too high.
Shares in Emaar have increased more than 15 per cent since the start of the year, from Dh2.5 each to Dh2.97 yesterday.
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