Emaar Malls reported a 16 per cent increase in third-quarter net profit to Dh435 million as rental income increased.
The shopping malls and retail business majority-owned by global property developer Emaar Properties said rental income for the three months to the end of September increased by 8 per cent compared with a year ago to stand at Dh774m.
For the nine-month period to the end of September, Emaar Malls’ net profit advanced 16 per cent to Dh1.4 billion, while rental income was up 10 per cent compared with a year ago, at Dh2.39bn.
The results were in line with analysts’ expectations.
A Bloomberg average of three analysts’ forecasts predicted third-quarter profits to come in at Dh435.6m.
The company, which was spun off from Dubai property developer Emaar in 2014, also reported that finance costs had fallen substantially over the period, dropping 15 per cent for the quarter to Dh51m and 19 per cent for the nine-month period to Dh147m.
Emaar Malls said that occupancy levels across its 6-million-square foot portfolio, which includes The Dubai Mall, Dubai Marina Mall, Souq Al Bahar and Gold & Diamond Park as well as other community retail, averaged 96 per cent during the first nine months of this year, similar to levels last year. Mohamed Alabbar, the chairman of Emaar Malls and Emaar Properties, said the results had been catalysed by “the robust economic environment of Dubai”.
The rise increase in profits comes despite tough market conditions for some retailing segments.
Retailers have come under pressure from the weak oil price and a strong dollar to which the dirham is pegged.
That has eroded the purchasing power of some overseas visitors whose purchasing power has weakened.
According to a forecast from retail consultancy Euromonitor, retail spending in the Emirates is on track to increase by 7 per cent this year to US$53.7bn.
The property consultancy CBRE reports that Abu Dhabi and Dubai have a combined 626,887 sq metres of retail space under construction, up by 11 per cent on a year ago.
“These results are very much in line with expectations but, if you take into consideration that these results covered a period including Ramadan and two Eids, something a number of other companies have given as a reason for falling sales levels, then it seems that Emaar Malls actually did very well,” said Sanyalak Manibhandu, the head of research at NBAD Securities.
“My reason for this is that the downturn in the Saudi Arabian economy has actually been benefiting Dubai,” Mr Manibhandu said. “Saudis may not be able to justify travelling further afield in these times, but they can still afford to come to Dubai for shopping.”
lbarnard@thenational.ae
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