Emaar Q3 profit up 20% as company looks to Dh25bn project

Developer agrees to joint venture for project called The Valley on Dubai-Al Ain Road

Dubai, United Arab Emirates - April 25, 2019: Emaar building with branding. Thursday the 25th of April 2019. Business Bay, Dubai. Chris Whiteoak / The National

Emaar Properties said third quarter net profit surged 20 per cent as the UAE's largest listed developer plans a new Dh25bn project on the Dubai-Al Ain road.

Net profit for the three months to the end of September reached Dh1.33 billion as revenue rose 14 per cent to Dh6.08bn, ahead of analysts’ expectations. The company attributed the growth to "the continuous interest from foreign investors in both residential and commercial developments as well as new, first-time home buyers entering the UAE property market".

"Emaar's results are driven by its key principles of having the best people working day and night to achieve utmost customer happiness through providing them superior product and services," the company's chairman, Mohamed Alabbar, said in a statement to the Dubai Financial Market, where its shares trade.

"In these dynamic markets, maintaining superior performance is a key testimony of an excellent team and their continuous efforts to achieve efficiencies, superior product and financial results."

Emaar Properties is Dubai's biggest developer, having delivered more than 59,000 new homes since 2002. The company also has a land bank of more than 1.7 billion sq ft.

For the first nine months of the year, the company reported a net profit of Dh4.44bn and revenue of Dh17.64bn, which were 3 per cent and 1.4 per cent higher year-on-year, respectively. It also recorded property sales in Dubai of Dh12.624bn, which it said was 25 per cent higher than the same period last year.

Emaar Development recorded a net profit of Dh2.07bn for the nine-month period on revenue of Dh9.63bn as it launched 19 new projects. The statement said the company has also entered into a joint venture for a new, Dh25bn project on the Dubai-Al Ain road called The Valley. It did not name the joint venture partner and did not immediately respond to a query from The National.

The company also recorded a 6 per cent increase in both revenue and profit at its Emaar Malls business, to Dh3.4bn and Dh1.7bn, respectively, while its international arm recorded a 22 per cent increase in revenue to Dh2.67bn, the statement said.

Emaar Properties' results were made following the market's close on Sunday, when the company's shares finished 1.2 per cent lower at Dh4.13 per share.

Last week, Dubai-based portal Property Finder reported transactions in Dubai's property market hit an 11-year high in October, but prices are still declining due to the amount of new supply on the market.

According to JLL's third quarter UAE Real Estate report, apartment prices fell 7 per cent and villa prices 8 per cent year-on-year in the three months to September. The number of homes stood at 542,000 at the end of the quarter, with 33,000 new properties scheduled to be delivered by the end of this year and a further 65,000 due to come onto the market next year.

However, the firm said that developers are "responding to the need for lower levels of future supply", with the 7,800 projects launched so far this year the lowest number recorded for the past three years.

A real estate planning committee was also set up in September to better co-ordinate the launch of projects between state-owned and private sector developers.