Emaar Properties first-quarter profit rose more than 7 per cent, helped by its retail assets.
Last year the developer hived off 25 per cent of its prestigious shopping centres division through an IPO. Assets in the vehicle, 75 per cent of which is still owned by Emaar, include the developer’s vast Dubai Mall complex.
Emaar said that net profit for the three months to the end of March rose to Dh1.02 billion from Dh957 million last year. However, the group’s sales were 2 per cent down on the previous quarter.
Emaar said that had the IPO not taken place, year on year net profits would have increased 14 per cent. At the same time revenue rose 25.9 per cent to Dh3.01bn, up from Dh2.39bn a year earlier, Emaar reported.
Revenues at Emaar Malls Group, which reported its first- quarter accounts last week, rose 21 per cent compared with the same period the previous year to stand at Dh735m.
But revenues from the company’s hospitality and leisure division, previously one of Emaar’s key drivers for growth grew just 2.4 per cent from the previous year to stand at Dh495m as the company which operates The Address and Vida brands appeared to have been hit by a slowdown in the Dubai hospitality market.
Revenues from Emaar’s main real estate division soared to Dh1.49bn, up from Dh943.3m a year earlier.
The developer changed the way it reported its accounts in the quarter, adopting International Financial Reporting Standard 15, which recognises revenue based on how much of a building has been completed rather than recognising the whole amount only when completed and handed over.
“This in our opinion should help Emaar report higher revenues and profits from an accounting perspective,” said Harshjit Oza, assistant director for research at Naeem Brokerage. “The strong growth was attributed to accelerated construction spending, which Emaar was able to record as revenues under IFRS 15.”
Mohamed Alabbar, the Emaar Properties chairman, said that the company would be “launching new real estate assets that meet demand from buy-to-live customers” in Dubai.