* Q1 net down 31.5 percent at 273 million riyals
* Compares with forecast 342.0 million
* Op profit 339.6 million vs 435 million year ago
(Adds details, background)
By Asma Alsharif
RIYADH, April 20 Dar al-Arkan 4300.SE, Saudi
Arabia's biggest property developer, reported a 31.5 percent
drop in first-quarter net profit, the company said in a bourse
statement on Wednesday, missing analyst forecasts.
Dar al-Arkan made 273 million riyals ($72.8 million) in the
three months to end-March, down from 398.6 million in the same
period a year earlier.
Analysts surveyed by Reuters on averge expected the firm to
post a net profit of 342.0 million riyals. [ID:nLDE7390BS]
The developer attributed the loss to a decline in sales
revenue and profit margins during the period, without being
While Saudi Arabia is facing a shortage in housing supply,
Dar Al-Arkan said it is seeing lower demand and lower profit
margins resulting from the geographic locations of the land
plots being sold.
Some 80 percent of Dar al-Arkan's assets of about 23 billion
riyals are land plots in the kingdom where analysts say
properties are hard to value.
The developer's operational profit dropped 22 percent to
339.6 million riyals in the quarter, compared with 435 million
riyals in the same quarter a year earlier.
Dar al-Arkan has to repay a $1 billion sukuk maturing in
2012 and said in November it may resort to selling some assets
to cover its debt. [ID:nLDE6AQ00R]
Saudi Arabia is facing a shortage in housing due to rapid
population growth and an inflow of expatriate workers coming
into the kingdom, which has over 27 million people.
A report by Banque Saudi Fransi in March said private and
public developers need to build about 275,000 units a year
through 2015 to meet the country's demands for about 1.65
million new homes. [ID:nLDE72J0E6]
Also last month King Abdullah announced $93 billion in
social handouts which included 250 billion riyals ($66.7) to be
spent on 500,000 new homes in the country.
Dar al-Arkan's shares slid 1.6 percent to 9.2 riyals on
Wednesday, before the earnings were announced, underperforming
the all-share index .TASI which gained 0.8 percent.
(Editing by David Holmes)