Dar Al-Arkan sees earnings jump 45%

PROPERTY BOOM: Dar Al-Arkan saw second quarter profit jump 45 percent to $183.3 million. (AFP)

Dar Al-Arkan Real Estate Development Co, Saudi Arabia's largest developer by market value, posted a 44.9 percent jump in second-quarter profit as property demand grew in the largest Arab economy.

Dar Al-Arkan posted earnings of 687.53 million riyals ($183.3 million), or 1.27 riyals per share, in the three months to June 30, compared with 474.44 million riyals, or 0.88 riyals per share, a year earlier, it said in a statement on the Saudi bourse website.

Quarterly profit growth was buoyed by a 49 percent jump in revenues to 1.55 billion riyals from 1.04 billion riyals a year earlier, Dar Al-Arkan said.

The company cited "improvement in the operational performance and the increase in demand for property" as the key driver of revenue in the quarter.

The earnings topped a forecast of 493.4 million riyals by Bakheet Investment Group in a net profit survey by newswire Reuters last month.

Real estate firms in the world's biggest oil-exporting region have been expanding as Gulf Arab economies boom on a more than six-fold rise in oil prices since 2002, which has triggered a construction boom in the region.

Dar Al-Arkan planned to expand its developments and diversify investments to achieve growth in sales and profits, board member Abdullatif Al-Shalash said in the statement.

Emaar Economic City, an affiliate of Dubai-based Emaar Properties, is building King Abdullah Economic City on the Red Sea, which has attracted around $35 billion in investments to last month.

Dar Al-Arkan, catering mainly to the middle-class market, raised 3.33 billion riyals in an initial public offering in December that was more than three times oversubscribed.

The company's share have fallen 35.37 percent this year to Saturday's close, underperforming the main index, which is down almost 18 percent.

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