Dubai's Emaar posts 27% drop in 2011 net profit

Dubai-based real estate giant Emaar Properties announced Tuesday a 27 percent drop in 2011 net profit to $489 million. The 1.794 billion dirhams net compared with 2.448 billion dirhams ($665.2 million) a year earlier, the company said. Net operating profit was at 2.058 billion dirham ($560 million) in 2011, down 32 percent from 3.034 billion ($826.7 million). But net profit in the fourth quarter surged 161 percent to 716 million dirhams ($195 million) from 274 million dirhams ($74.66 million). Losses due to provisions made for impaired assets reached 264 million dirhams ($71.9 million), compared to write-offs of 533 million dirhams ($145.2 million), it said. The company behind major property developments in Dubai, including the world's tallest building, Burj Khalifa, said annual revenues fell 33 percent to 8.112 billion ($2.209 billion) from 12.150 billion dirhams ($3.31 billion). But it boasted that its Dubai Mall was the world's most visited shopping and tourism destination marking record visitor numbers of 54 million people in 2011. Shopping malls and retail businesses contributed 2.14 billion dirhams ($583 million) to annual revenues, or 26 percent of the total, and 13 percent higher than their 1.9 billion dirhams ($517 million) a year earlier. Revenues from Emaar's hospitality and leisure business rose 22 percent, contributing 1.22 billion dirhams ($332 million) in 2011, or 15 percent of total revenues, compared to one billion dirhams ($272 million). "The robust financial performance of Emaar in 2011 is a testament to Dubai's status as the Middle East region's business and lifestyle hub," said chairman Mohamed Alabbar. "With The Dubai Mall hosting more than 54 million visitors, the city has firmly established its global credentials as an international business and leisure destination," he said. "This status perfectly complements the strategically diversified business interests of Emaar, supported by our shopping malls and retail and hospitality and leisure businesses, which achieved solid growth in their contributions to recurring revenues in 2011," he added. Revenues from international operations almost doubled to 1.81 billion dirhams ($493 million) from 973 million dirhams ($265 million), with its share of revenues increasing to 22 percent from eight percent. "Our strategy for 2012 is to further increase the share of revenues from global operations and enhance the proportion of profit from recurring revenue streams, including shopping malls and retail and hospitality and leisure," said Alabbar. Emaar said it handed over 350 residential and over 800,000 square feet (74,322 square metres) of commercial space in Dubai and 604 units in other global markets, and has done so with more than 33,500 residential units since 2001. The glitzy Gulf business and tourism hub of Dubai was hard-hit by the global financial crisis, especially in its once-booming real estate sector.