Dubai-based Emaar Properties recorded a growth in net profit of 15 per cent to Dh2.837 billion ($772 million) during the first six months of this year (H1 2017), compared to Dh2.475 billion ($674 million) during the same period last year.
H1 2017 revenue was Dh7.866 billion ($2.142 billion), an increase of 8 per cent over H1 2016 revenue of Dh7.257 billion ($1.976 billion).
Emaar also announced a plan to list its UAE Real Estate development business through up to 30 per cent share offering on the Dubai Financial Market (DFM). The funds raised through the sale of equity will be primarily distributed as dividends to shareholders. This will ensure that the value of this business is properly recognised, thereby enhancing value for Emaar shareholders, the company said.
Recurring revenue from Emaar’s shopping malls and retail, hospitality and leisure, commercial leasing and entertainment businesses in H1 2017 was Dh3.016 billion ($821 million), which represents 38 per cent of the total revenue, the company said.
Emaar’s revenue from its international development recorded a growth of 64 per cent in H1 2017 to Dh1.697 billion ($462 million), compared to the H1 2016 international revenue of Dh1.032 billion ($281 million). This was underpinned by significant progress in projects achieved in key markets including Egypt, Turkey, India and Saudi Arabia, among others. Emaar’s international development now contribute 22 per cent to the total group revenue, it said.
In the second quarter of 2017 (Q2 2017), Emaar recorded a net profit of Dh1.453 billion ($396 million), an increase of 14 per cent over Q2 2016 net profit of Dh1.270 billion ($346 million).
A customer-focused digital organisation
Mohamed Alabbar, chairman of Emaar Properties, said the positive performance builds on Emaar’s ongoing focus on project delivery and being a customer-centric organisation. “Organisation-wide, we are marking a transformational change to strengthen project management and service excellence led by digital technology. At every stage of development, we place emphasis on being more efficient and responsive to the aspirations of our customers, and to create long-term value for our stakeholders.
“This complements the transition of the nation into a smart economy led by the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai. As a year-round tourism and retail destination, and with a focus on infrastructure development, the UAE has evolved as a global business and leisure hub, and through our projects, we are contributing to the nation in driving sustained economic growth,” he added.
Emaar’s commitment to value creation for shareholders was highlighted by the company distributing a cash dividend of 15 per cent of the share capital, equivalent to Dh1.074 billion ($292 million), the company said.
Smart city hubs of the future
During the first six months of 2017, Emaar recorded property sales in Dubai of Dh10.814 billion ($2.944 billion), 22 per cent higher than Dh8.9 billion ($2.42 billion) during the same period in 2016, underlining the significant customer interest in Emaar’s projects.
This growth was led by residential launches in Emaar’s flagship projects including Dubai Creek Harbour, Downtown Dubai, Dubai Hills Estate and Emaar South – the smart city hubs of the future. The new residential project launches in the first six months of the year included: Downtown Views II and Vida Dubai Mall in Downtown Dubai, Vida Residences in Dubai Marina, Creek Gate, Harbour Gate and Creek Rise in Dubai Creek Harbour, Park Heights I & II and Maple 3 in Dubai Hills Estate and Golf Views apartments and Urbana III stacked townhouses in Emaar South.
A highlight of Emaar’s property development portfolio was the completion of foundation work for the Dubai Creek Harbour Tower. More than 145 barrette piles have been laid to depths of over 72 metres to secure the super-tall structure. Emaar also achieved the challenging engineering feat of designing, constructing and lifting an iconic Sky Bridge that links the new Address Sky View hotel with the Address Residences Sky View in Downtown Dubai.
With robust sales in Dubai, Emaar now has a total backlog of Dh49.5 billion ($13.5 billion) including a backlog of over Dh40 billion ($10.9 billion) in Dubai, to be recognised in the next few years, a testament to the company’s strong financial fundamentals.
Steady growth in recurring revenue
Emaar Malls, the shopping malls and retail business majority-owned by Emaar Properties, reported H1 2017 net profit of Dh1.021 billion ($278 million), 3 per cent higher than H1 2016 net profit of Dh987 million ($269 million). Emaar Malls revenue in H1 2017 is Dh1.624 billion ($442 million), similar to H1 2016 revenue of Dh1.618 billion ($441 million).
As part of the digital transformation initiatives, Emaar Malls acquired a 51 per cent stake in Namshi, the leading online fashion retailer in the Middle east. This complements its focus on multi-channel retailing, and creating long-term value for its stakeholders. At its second Annual General Meeting in April, Emaar Malls distributed 10 per cent of the share capital, equivalent to Dh1.301 billion ($354 million) as cash dividend to the shareholders.
The shopping mall assets of Emaar Malls welcomed over 65 million visitors in the first half of 2017, an increase of 7 per cent over H1 2016.
The hospitality & leisure, commercial leasing and entertainment businesses of Emaar recorded H1 2017 revenue of Dh1.392 billion ($388 million), which is 7 per cent higher than the H1 2016 revenue of Dh1.298 billion ($353 million).
Emaar further strengthened its hospitality portfolio in the first half of the year with the opening of three properties – Address Boulevard in Downtown Dubai, Rove Healthcare City and Rove Trade Centre. Occupancy levels at Address Hotel + Resorts were 82 per cent, higher than industry average.
One of the world’s largest real estate companies, Emaar has a land bank of about 188 million sq m in the UAE and key international markets. With a proven track-record in delivery, Emaar has delivered over 43,200 residential units in Dubai and other global markets since 2001