Emaar Properties' first-half profit dips on higher costs

Expenses climb 12% to Dh2.16bn in first six months of 2019

DUBAI, UNITED ARAB EMIRATES- Burj Khalifa lit up with UAE flag at Dubai Mall, Dubai.  Leslie Pableo for The National
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Emaar Properties, Dubai's largest listed developer, recorded a 52 per cent rise in first-half sales, though profit slid four per cent on higher costs.

The company's property sales during the first six months of the year grew to Dh9.4 billion year-on-year, Emaar Properties said in a statement to the Dubai Financial Market on Sunday. However, the company's net profits during the period declined to Dh3.1bn and revenues fell four per cent to Dh11.5bn.

"The driving force of Emaar’s strong, consistent performance this year is the enhanced reputation of Dubai as the first choice among the leading global destinations for property investment," Mohamed Alabbar, chairman of Emaar Properties, said "Our successful expansion to malls and hospitality, which complements the tourism sector of Dubai, too generates significant revenue."

Residential property prices in Dubai have been declining since 2014 due to oversupply and slowing demand following the three-year drop in oil prices.

Emaar Properties' expenses from sales, administration and marketing rose 12 per cent to Dh2.1bn in the first half of the year, according to the filing.

Emaar said its total sales backlog reached Dh49.2 bn as of June 30, which will be recognised as revenue in the next three to four years.

Emaar Development, which is also a listed company, recorded a net profit of Dh1.3bn and revenue of Dh6.2 bn for the first six months of the year.

Emaar Malls recorded 6 per cent growth in revenue to Dh2.2bn during the first six months and net profit increased by 3 per cent to Dh1.1 bn during the period.

Emaar Malls assets – which include the Dubai Mall, Dubai Marina Mall, Gold & Diamond Park, Souq Al Bahar and the Community Retail Centres – posted occupancy level at 92 per cent. Visitors arrivals reached 68 million during the first half, up 2 per cent on the same period a year ago.