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Emaar announces $1.5bn profit, down 15%

Emaar chairman Mohamed Alabbar said on Thursday his company was facing "new economic realities in an unprecedented downturn" as the developer posted a 15.1 per cent drop in operating profit.

The largest developer in the Middle East, which is building the world’s tallest tower, the Burj Dubai, saw operating profit slide from $1.79bn in 2007 to $1.52bn last year as revenues declined 10.4 percent from $4.87bn to $4.36bn.
It blamed a $687m good will write-down last year on its US subsidiary John Laing Homes, which has suffered at the hands of the battered US housing market.

Last month John Lang Homes said it was cutting jobs and reviewing operations due to the global credit crisis.

Speaking as Emaar released its full year 2008 results, Alabbar said: “The primary focus of Emaar in the last quarter of the year was to mitigate the negative impact of the global financial crisis by facing up to the new economic realities and identifying innovative strategies to sustain businesses in an unprecedented downturn.”

Emaar said it had put some new projects on hold to ‘assist in reducing the real estate property supply in Dubai'. New launches of schemes in 2009 would depend on a review of the supply and demand balance in the city, the group said.

Analysts had widely expected poorer full year results from Emaar.

In January Credit Suisse predicted an 18 percent drop in full year profit for the developer.

Emaar, whose shares were 0.5 percent down at AED2.0 at 15.33 on Thursday, is currently developing the King Abdullah Economic City, the region’s largest private sector-led project.

It is also largely active in North Africa and across the Indian subcontinent.

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