Dubai's Emaar Properties says profits to quadruple by 2018
DUBAI, April 23
DUBAI, April 23 (Reuters) - Emaar Properties, Dubai's largest listed real estate developer, predicted on Wednesday that its profits would more than quadruple by 2018 as the emirate's economy booms and the company's overseas business expands.
The company, about 29 percent owned by the Dubai government, is seen by many investors as a proxy for the emirate's economy, which relies heavily on real estate development, tourism and the retail industry - sectors in which Emaar is a major player.
The company's optimism underlines Dubai's strong recovery from its 2008-2010 real estate market crash. Average residential property prices jumped 33 percent from a year earlier in the first quarter of 2014, according to consultants JLL.
Emaar chairman Mohamed Alabbar told the company's annual general meeting, a lavish evening event held outdoors by the Burj Khalifa, the world's tallest skyscraper which was built by Emaar, that he expected net profit to hit 3.07 billion dirhams ($837 million) this year.
That would mark an increase of 19 percent from last year's 2.57 billion dirhams. Alabbar predicted a continued rise in subsequent years, hitting 5.82 billion dirhams in 2016 and 10.93 billion dirhams in 2018.
"These are realistic expectations and even a bit conservative," he said, adding that the company only booked profits upon completing projects.
Much of Emaar's growth is expected to come from projects worth billions of dollars within Dubai; over the last 18 months, the company has announced plans for huge residential and commercial developments in the emirate.
Last month the company said it would sell up to 25 percent of its shopping mall unit in coming months through a public offer expected to raise between 8 and 9 billion dirhams, one of the region's largest equity offers since 2008. Shares in the unit may be listed in London and Dubai.
Emaar is also involved in projects across much of the Middle East, including Saudi Arabia, Egypt and Turkey, and countries as far afield as Pakistan and Indonesia.
"We don't guarantee the economic and political situations in the countries we operate. In Egypt for example the company halted operations for around six months during the revolution" of 2011, Alabbar said.
Shareholders approved a 15 percent cash dividend and a 10 percent bonus share issue for 2013; it was the company's highest dividend since 2007, when the cash dividend was 20 percent. The cash dividend for 2012 was 10 percent of share capital.
Emaar shares are up 43 percent so far this year to 10.95 dirhams, but many analysts see room for further gains; brokerage Naeem late last month raised its target price to 13.15 dirhams. (Editing by Andrew Torchia)
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