Declining sales of building-ready land, its main revenue source, is behind decline.
Saudi-based real estate developer Dar al-Arkan said second-quarter earnings fell by almost 30 percent on declining sales of building-ready land, its main revenue source.
Second-quarter net profit was broadly in line with analysts forecasts at SR437 million ($117 million), down 29.3 percent from SR618.3 million a year earlier, Saudi Arabia's largest property developer by market value said in a statement to the Saudi bourse.
Analysts surveyed by Reuters had expected on average net profit of SR431 million.
"The decline in second-quarter net profit... is due to a decrease in the areas of sold land," the company said without giving any figures.
Land sales generate the the bulk of revenues and profit for the firm: They accounted for 90 percent of its revenues during the first quarter and 96 percent of its gross profit for the period.
The repercussions of the global financial crisis have led to a drop in the amount of liquidity that goes into land speculation in Saudi Arabia, resulting mainly in a decline in the volume of transactions, industry sources say.
By end-June, earnings per share fell to SR0.77 down from SR0.97 a year earlier while net operating income fell 26.4 percent to SR492 million. (Reuters)