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Tue 24 Apr 2007 09:51 PM

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Dubai's Amlak profit down on delays

Delays in property projects have restricted the Islamic mortgage provider's revenue growth.

Islamic mortgage provider Amlak Finance, Dubai's worst performing stock this year, posted its second-smallest quarterly profit in two years after delays in property projects restricted revenue growth.

Net income in the three months to March 31 plunged 35.4% to 24 million dirhams ($6.53 million) after depositors' share, compared with 37.13 million dirhams in the year-earlier period, the Emaar Properties affiliate said in a statement.

"The continuing delay of many major property developments has had an impact on disbursements and a knock on effect on profit," said Amlak, which is 45% owned by Dubai-based property developer, Emaar.

"Amlak expects to see the gradual roll out of many of the larger developments during the second and third quarters," it said.

The earnings fell well short of analysts' expectations in a in a Reuters survey last month that ranged between 40 million dirhams and 43 million dirhams.

The company made 14.94 million dirhams in the fourth-quarter, its smallest profit in two years.

Amlak Deputy Chief Executive Shahli Akram declined to comment when contacted by Reuters.

The company plans to apply for licences to sell mortgages in Syria and Pakistan, Akram said this month. That is after it starts operations in Egypt and Saudi Arabia.

Amlak said this month the United Arab Emirates central bank had rejected a request for a banking licence and the company was considering an Islamic bond sale as another way of raising funds.

A bank licence would allow Amlak to collect deposits, driving down costs and letting the company offer cheaper mortgages.

EFG-Hermes investment bank this month gave Amlak a long-term reduced rating and set a price target of 4.52 dirhams for the stock. The stock has plunged 44% this year, compared with the index's decline of 6.18% to Monday's close.

Shares of Amlak closed 0.34 percent lower on Tuesday at 2.89 dirhams.

Investors from outside the six Gulf Arab states are allowed to own as much as 40% of the company.

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