Dar Al-Arkan profit hit by extra costs

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EXTRA COSTS: Dar Al-Arkan saw first quarter profit grow considerably below growth in revenue. (Getty Images)

Dar Al-Arkan Real Estate Development Company, Saudi Arabia's largest property developer by market value, said first-quarter profit rose 6.6%, considerably below growth in revenues.

The firm made 452 million riyals ($120.5 million), or 0.84 riyals per share, in the three months to March 31, up from 424 million riyals, or 0.79 riyals per share, in the year-earlier period, it said in a statement on the bourse's website.

Operating profit rose 26.5% to 548 million riyals and revenues rose 35% to 1.23 billion riyals, it added.

It did not explain the gap between the growth in net profit and operating profit, but said it had added costs of a 6 billion riyals Islamic bond issue to its assets in the first-quarter of 2008.

Annual growth in the net profit was 70% in the fourth-quarter of 2007.

Shares of Dar Al-Arkan, which caters mainly to a middle class market, last traded on Tuesday at 61.5 riyals, down 0.8% from Monday.

Higher property prices in the largest Arab economy helped boost Dar Al-Arkan's 2007 net profit by 11.1% to 2 billion riyals, or 3.72 riyals per share, it said.

Dar Al-Arkan raised 3.33 billion riyals in an initial public offering (IPO) in December that was more than three times oversubscribed. It sold the shares at 56 riyals each. (Reuters)

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