Emaar’s 2023 profit jumps 70% on higher property sales

Company's net profit for the 12 months to the end of December reached $3.2 billion

Emaar's revenue grew 7 per cent in the 2023 financial year. Chris Whiteoak / The National

Emaar Properties, Dubai's largest listed developer, reported a 70 per cent annual jump in its 2023 financial year net profit, driven by increased sales as the UAE property market continues to grow strongly.

Net profit for the 12 months to the end of December rose to Dh11.6 billion ($3.2 billion), the company said in a statement on Thursday to the Dubai Financial Market, where its shares are traded.

The company’s revenue grew 7 per cent to Dh26.7 billion during the period.

The performance was supported by growth in tourism, retail sales and rising real estate demand, the developer said in a statement.

Group property sales surged 15 per cent year-on-year to Dh40.3 billion in the January-December period. The company’s revenue backlog from property sales reached Dh71.8 billion as of December 31, indicating a positive outlook for revenue in the forthcoming years.

Mohamed Alabbar, founder of Emaar. Khushnum Bhandari / The National

“The strategic initiatives undertaken in the past two years, coupled with enhancements in consumer confidence and overall business dynamics, especially in the real estate and retail sector, have significantly influenced our company’s operations throughout the previous year,” Mohamed Alabbar, founder of Emaar, said.

Emaar achieved 63 per cent annual growth in earnings before interest, taxes, depreciation and amortisation (ebitda) that stood at Dh16 billion during 2023.

Emaar Development, a majority-owned subsidiary specialising in the build-to-sell property development business, recorded property sales of Dh37.4 billion last year, up more than 21 per cent on 2022, the company said.

Its revenue during the period reached Dh11.9 billion, while ebitda grew 89 per cent annually to Dh8 billion. The division launched 27 new projects in the UAE in 2023.

Dubai's property market rebounded strongly from the coronavirus-induced slowdown on the back of government initiatives and broader growth in UAE’s economy.

The total value of real estate deals in the emirate reached Dh634 billion, with the number of transactions hitting 166,400 in 2023, according to the latest data from the Dubai Land Department. This marked an annual growth of 20 per cent in the value of deals and 36 per cent in the number of transactions.

Emaar's shopping mall, retail, and commercial leasing operations, meanwhile, reported revenue of Dh5.8 billion in 2023, according to the statement. The company attributed it to robust growth in tenant sales, which led to an increase of about 21 per cent. Its mall assets achieved an average occupancy of 97 per cent as of December 31.

Emaar’s international real estate operations, which represent nearly 12 per cent of Emaar’s total revenue, recorded property sales of Dh2.9 billion with revenue totalling Dh3.1 billion during the period. This was primarily driven by operations in Egypt and India, the company said.

The company’s India operations experienced a four-fold increase in property sales driven by new launches.

In June, S&P Global Ratings upgraded Emaar Properties' long-term issuer credit rating based on expectations of more robust business performance.

The company's credit rating was upgraded to “BBB” from “BBB-", with a stable outlook.

“We look forward to a positive performance in our shopping centres, hotels and property sales in 2024. We remain committed to unveiling innovative projects and unparalleled offerings across all our business divisions,” Mr Alabbar said.

Emaar said its mall assets achieved an average occupancy of 97 per cent as of December 31. Chris Whiteoak / The National

In 2023, Emaar’s hospitality, leisure, and entertainment divisions generated Dh3.4 billion in revenue, up 20 per cent compared to 2022 amid a steady recovery in the tourism sector and strong domestic spending.

Emaar’s UAE hotels reported an average occupancy of 72 per cent last year as the company expanded its collection of hotels, both domestically and internationally, adding around 1,600 new hotel room keys.

Dubai recorded its best annual tourism performance in 2023, with international tourist arrivals to the emirate increasing by 19.4 per cent annually to 17.15 million, amid the continued expansion of its economy.

Last year’s figure exceeded the previous record of 16.73 million visitors registered in 2019, according to the latest data published by Dubai’s Department of Economy and Tourism.

Emaar's recurring revenue from malls, hospitality, leisure, entertainment, and commercial leasing rose more than 26 per cent annually to Dh9.2 billion during the period, the company said. Revenue from this portfolio constituted over 34 per cent of the company’s total revenue in 2023.