Dubai’s Emaar Q2 net profit plunges 69 pct, misses view
Q2 net profit 250 mln dirhams vs 801.9 mln dirhams in Q2 2010; Developer hands over 244 units in Q2 vs 612 units yr-ago; Q2 revenues fall 23 pct; results miss forecasts; Writes off Dubai Bank investment in Q2
July 27, 2011 8:42 by Reuters
Emaar Properties , UAE’s largest developer by market value, reported a 69-percent plunge in second-quarter net profit on Tuesday, missing estimates, as it handed over fewer homes and wrote off its investments in Dubai Bank.
The builder of the world’s tallest tower, Burj Khalifa, made a net profit of 250 million dirhams ($68.1 million) for the quarter ended June 30, compared with a profit of 801.9 million dirhams in the same period a year ago.
Analysts polled by Reuters on average expected the firm to post a quarterly net profit of 358.18 million dirhams.
Emaar handed over around 244 units during the second quarter, down from 612 units in the same period last year, it said in a statement on Dubai’s bourse website.
This was also down from 270 handed over in the first quarter of this year.
Emaar, which has set up a core team for a strategic review of its operations, said revenues in the second quarter fell to 2.03 billion dirhams, a drop of 23 percent.
The developer wrote off its investment in Dubai Bank, valued at 172 million dirhams it said in the statement. Dubai government announced in May that it would take over the troubled lender.
Net profit for the first six months of 2011 fell 49 percent to 843 million dirhams, Emaar said.
Emaar’s shares closed 0.3 percent lower on the Dubai bourse before the results were announced. The shares have fallen 19 percent year-to-date.
House prices in Dubai will fall another 10 percent, a deepening a three-year rout to nearly 60 percent from its peak, a Reuters poll showed earlier in July. (Reporting by Jason Benham, Editing by Dinesh Nair)