By John Irish
UPDATE 1: Amlak chairman says expects profit to surge by a "minimum of 100 percent" this year.
Dubai Islamic mortgage lender Amlak Finance revised up its 2008 profit outlook on Sunday, after posting record profit in the third quarter driven by home financing and property investments.
Amlak, which on Saturday said it was in early talks to merge with fellow Dubai mortgage lender Tamweel, more than doubled third-quarter profit to 174.33 million dirhams ($47.45 million) from 67 million dirhams in the year-earlier period.
The quarterly profit, which Reuters calculated based on half-yearly earnings released by the firm, was the highest on record, according to company data going back to 2003.
"These earnings are especially good as we were afraid of the third quarter results," said Samer Jaouni general manager of Middle East Financial Brokerage Co, whose firm predicted a quarterly profit of 152 million dirhams in a Reuters survey in September.
Driven by a real estate boom in the second-largest Arab economy, Amlak's full-year profit growth is forecasted at a "minimum of 100 percent", Chairman Nasser Al-Shaikh said in a statement.
The company, which is part-owned by Emaar Properties, saw nine-month revenues soar 112 percent to 963 million dirhams, it said in the statement, adding that property financing contributed 71 percent of total revenue.
The firm did not give a breakdown of what drove net income.
Neither Al-Shaikh, who is also director general of Dubai's Department of Finance, or Chief Executive Arif Alharmi were immediately available for comment.
Shares of Amlak fell 3.94 percent to 3.17 dirhams on Sunday. The results were released after the close of trading. Shuaa Capital in July raised its fair value target on Amlak to 4.86 dirhams.
"In a normal situation these results should reflect well on the share price," Jaouni said.
"It's positive, but everyone is questioning the real estate sector and financing for it, but Amlak are very bullish and optimistic for the future."
The UAE's burgeoning mortgage business has surged since 2002 as the second-largest Arab economy expanded on a more than four-fold rise in oil prices and some emirates, including Dubai and Abu Dhabi, began allowing foreigners to invest in properties.
The global funding crisis has added pressure on lenders and builders in Dubai's booming real estate sector as financing tightens amid a lack of liquidity in the market.
As banks boost their mortgage offerings and heighten competition at home, Amlak is also expanding across the region to diversify its revenue sources.
The firm, which operates units in Egypt and Saudi Arabia, is set to launch in Jordan and Qatar.
Amlak made 444 million dirhams in the nine months to Sept. 30 compared with 173 million for the same period last year, it said without giving a quarterly figure and had assets worth 15.8 million dirhams at the end of September. (Reuters)