Emaar Q2 profit hits $452mn

PROFIT RISE: Developer Emaar Properties posted a net profit of $452.1 million in the second quarter. (Getty Images)

Emaar Properties returned to profit growth in the second quarter but the largest publicly traded Arab developer said exposure to a global slowdown and inflation had offset strong property sales at home.

Emaar said net income in the three months to June 30 advanced 6.5 percent to 1.66 billion dirhams ($452.1 million), missing three of four analysts forecasts in a Reuters net profit survey last month.

The developer, with projects in 36 countries, owns John Laing Homes in the United States, where new home construction is sliding as subprime crisis continued to bite.

The company's first-quarter profit fell 3.8 percent. "Globally, the first-half of 2008 was marked by recessionary trends and mounting inflation," Emaar Chairman Mohamed Alabbar said in a statement.

"For a property developer of Emaar's geographic outreach, this period also meant greater exposure to the market challenges of rising prices and reduced consumer spending."

The property firm generates most of its income from its home market, Dubai, where the economy is surging on a near seven-fold increase in oil prices during the last six years that has spurred investment in the Gulf.

Calling domestic property sales the "prime driver", Emaar said revenues in the quarter were almost steady at 4.24 billion dirhams while gross profit gained 23.6 percent to 1.922 billion dirhams.

Among its flagship developments is the Burj Dubai tower, the world's tallest building and part of a $20 billion residential and commercial project Emaar is building close to the city centre.

Selling, marketing and general expenses rose to 623 million dirhams from 490 million dirhams, Emaar added. Analysts' forecasts for Emaar's second-quarter profit ranged from 1.57 billion dirhams to 2.10 billion dirhams in a Reuters survey last month.

Annualised earnings per share of 1.08 dirhams was unchanged from the year-earlier period, when Emaar made 1.56 billion dirhams. (Reuters)

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