Emaar Malls second quarter profit rises 15% and beats analysts' estimates

Crowds throng at the Dubai Aquarium on Eid Al Fitr holiday at Dubai Mall. Emaar Malls said second quarter net profit rose 15 per cent. 

Emaar Malls, the retail unit of Dubai-listed developer Emaar Properties, posted a 15 per cent increase in second-quarter net income, beating analysts' estimates, though quarterly footfall was little changed.

Net income rose to Dh554 million in the three months ending June 30, Emaar Malls said on Sunday in a filing to the Dubai Financial Market. The median of two analyst estimates was Dh522m, according to Bloomberg data. Revenue surged 35 per cent to Dh1.07 billion.

"We are now taking the Emaar Malls growth story to the next level with a firmer focus on omnichannel retailing," Mohamed Alabbar, chairman of Emaar Properties and board member of Emaar Malls, said. “Designed for the next generation and leveraging future technologies, these malls will bring the timeless charm of the city squares in a high-tech environment.”

Emaar Properties said last week it plans to build the “world’s first technology-embedded” shopping mall at a Dh10bn ($2.7bn) retail complex planned for Dubai Creek Harbour. The Dubai Square mall will span approximately 750,000 square metres – bigger than Emaar’s flagship The Dubai Mall, the biggest in the world – and have its own ‘Dubai OS’ operating system embedded into its wifi infrastructure to support retailers’ e-commerce operations. Mr Alabbar's $1bn e-commerce venture Noon.com will play a significant role in Dubai OS, with retailers able to list their products on the website.

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Across its assets, which include Dubai Mall and Dubai Marina, Emaar Malls saw 67 million visitors in the first half of the year, up three per cent from 65 million people in the same period a year ago. It did not provide quarterly figures for the number of visitors in its disclosure.

"The number of visitors were similar for both quarters," an Emaar Malls spokeswoman told The National in response to questions. "Actual numbers are not public."

However, the second-quarter's occupancy rate across its assets declined year-on-year as it added more assets. It recorded a 93 per cent occupancy in the second quarter compared to 95 per cent in the same quarter of 2017. The gross leasable area grew to 6.7m square feet in Dubai compared to 5.8m square feet a year ago.

“Emaar Malls revenue and profit is higher due to increased rentals. In addition, some increase is also due to new assets,” a company spokeswoman said. “Emaar Malls revenue is based on rentals and not on footfall.”

Namshi, the online retailer acquired by Emaar Malls in August 2017, posted a 22 per cent increase in sales to more than Dh384m in the first half, the company said without providing quarterly figures.

Mr Alabbar is increasingly interested in e-commerce investments as the Middle East's online shopping business grows at a fast rate, driven by the region's young and tech-savvy population. Still, logistics and e-payment obstacles mean that the the regional industry is not as well developed as its global peers.