Emaar Properties hit by US writedown

Emaar Properties reported second quarter sales of AED 1.9 billion (US$ 528 million), down -65% on the AED 5.6 billion (US$ 1.5 billion) recorded 12 months ago.

Following a second quarter pre-tax profit of AED 2.1 billion (US$ 575 million) in 2008, the company recorded a -AED 1.2 billion (-US$ 349 million) loss for the corresponding quarter this year.

Mr Mohamad Alabbar, chairman of Emaar Properties said, "Due to the continued slowdown in the US real estate market we decided to write down the complete book value of J L Homes, amounting to AED 1.7 billion (US$ 470 million). This meant that a potential pre-tax profit for the quarter of AED 442 million (US$ 120 million) was instead a -AED 1.2 billion (-US$ 349 million) loss."

Emaar Properties completed a large number of projects in the second quarter including Burj Views in downtown Burj Dubai, Fairways in The Views and Alma in Arabian Ranches. A statement said that rental and hospitality income also increased by +180% in the quarter as a result of mall and hotel openings at the end of 2008.

"The first half of the year was extremely challenging as we steered the company through new market realities," said Mr Alabbar. "We continue to tap new opportunities in promising emerging markets while strengthening our business in shopping malls and retail, hospitality and leisure and education and healthcare.

"The coming six months will once again put Emaar in the global spotlight as we unveil the Burj Dubai and hand over several other international projects," he said.