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- Emaar Properties’ H1 net profits fall 35.48% to Dh2 billion due to Covid-19
Emaar Properties’ H1 net profits fall 35.48% to Dh2 billion due to Covid-19
Emaar Properties’ net profit for the first half of 2020 plunged 35.48 percent to Dh2 billion mainly due to Covid-19 pandemic and subdued demand, down from Dh3.1 billion recorded in the corresponding period last year.
The developer of Burj Khalifa – the world’s tallest tower recorded revenues of Dh9.03 billion (US$2.46 billion), despite the impact brought to bear by the COVID-19 pandemic on the global economy, down from Dh9.4 billion (US$2.56 billion) in the first half of 2019.
“In line with the UAE’s globally acclaimed strategies in combating the pandemic, Emaar Properties’ half-yearly performance was underpinned by the company’s ongoing investment in innovation and digitalisation across its businesses,” the company said in a statement.
In the first half of the year, Emaar Properties sold Dh5.12 billion (US$1.39 billion) worth of properties.
Mohamed Alabbar, Founder of Emaar, reaffirmed Emaar’s resilience during the unprecedented times: “Our performance in the first half of 2020 has demonstrated our fundamental ability to retain strength and act with agility and speed in the face of the challenges presented by Covid-19. Emaar’s performance is a testament to the products we introduce and the people behind these innovations. Each year we set the bar higher, raising the expectations across all our businesses to ensure every Emaar touchpoint is met with the same standard of excellence”.
“We’ve placed an even greater emphasis on being a lean organisation and, through our geographical expansion, we have been able to deliver a solid performance. By acting boldly, innovating, revisiting our talent and retaining cash liquidity, I truly believe we have delivered a strong result despite the many challenges we faced. As the world emerges from Covid-19, I am confident that we will use our strength, talent and business diversity, that we have focused even more intensively on during these challenging times, to face the future stronger than ever.” he added.
Further, Emaar has also provided an additional online sales channel to its retailers during these challenging times by opening a virtual store on noon.com.
Revenues of Emaar Development, Emaar Properties development subsidiary, fell 22.79 percent to Dh4.81 billion (US$1.31 billion) in the first half of 2020, declining from Dh6.23 billion (US$1.7 billion) recorded in the first half of 2019 with half-yearly net profit declining 24.63 percent to Dh1.04 billion (US$282 million), down from Dh1.38 billion (US$376 million).
Emaar Development remains committed to its projects’ delivery timeframes, the company said. As of June 2020, Emaar’s delivery track record includes more than 64,700 residential units in Dubai and other international markets, with over 43,500 units delivered in the UAE.
Over 29,000 residences are currently being developed in the UAE, alongside 11,000 units across international markets. Emaar now has a total sales backlog of Dh41.75 billion (US$11.36 billion) of which Dh29.56 billion (US$8.05 billion) is in the UAE, to be recognised as revenue in the coming years.
Coronavirus pandemic and subsequent lockdown caused a 69.48 percent fall in the net profits of Emaar Malls to Dh345 million (US$94 million), in the first half of 2020, compared to Dh1.13 billion (Dh308 million) recorded in the corresponding period last year.
Shopping malls in Dubai were closed down for nearly two months from March 25, 2020, that caused massive losses in sale. As part of Emaar Malls’ commitment to extend support to their tenants, Emaar Malls also implemented a flexible rent Relief Policy in respect of the lockdown (March 25 – April 27) and post-lockdown (April 28 – August 31) periods. The Relief Policy included a tiered base rent waiver for its tenants.
The shopping malls and retail subsidiary of Emaar Properties’ revenue also declined 25.57 percent to Dh1.65 billion (US$451 million) in the first half of 2020, compared to Dh2.27 billion (US$606 million) recorded in the first half of 2019.
Emaar’s hospitality and leisure, entertainment and commercial leasing business contributed Dh831 million (US$226 million) to the total revenue. Along with Emaar Malls, these businesses posted a revenue of Dh2.48 billion (US$677 million), representing 28 per cent of Emaar’s total revenue.
Emaar International Emaar’s international property development recorded half-yearly revenue of Dh1.72 billion (US$470 million), similar to the revenues recorded during the same period last year. As of today, Emaar International contributes 19 per cent to Emaar total revenue.
The results were underpinned by continued successful operations in Egypt and Pakistan, including the launches of Cairo Gate mixed-use development and Panorama tower in Karachi. Visit emaar.com/en/investor-relations for more information.