Emaar founder sees 'world of opportunities' despite $1bn drop in profits
The founder of Dubai-based giant Emaar Properties, Mohamed Alabbar, has said there are a “world of opportunities” in 2021, despite seeing year-on-year profits drop by almost $1 billion.
The master developer behind the Burj Khalifa reported a net profit of $712m for 2020, down 58 percent from the $1.7bn announced 12 months previously; while revenues dropped almost 20 percent, from $6.7bn in 2019 to $5.366bn.
Emaar’s financial results were revealed on the same day that fellow Dubai-based developer Damac announced losses of over $272m for 2020, blamed largely on the impact of the global coronavirus pandemic.
Alabbar said: “Our performance in 2020 is a direct result of our ability to move quickly, adapt to new business conditions and utilise our existing resources to access new opportunities. We continue to embrace technology to help grow our business, while at the same time closely adhere to the cost discipline that helps us achieve better results in each quarter.”
Emaar recorded overall property sales of $2.968bn, of which $1.721 was achieved in the UAE. The company has a total sales backlog of $9.986bn, with $6.735bn-worth in the UAE.
Alabbar added: “Looking ahead to 2021, we see a world of opportunities – both traditional and tech-driven – that will help us grow in ways and in markets that didn’t exist five or ten years ago.”
Emaar Development, the company’s build-to-sell real estate business in the UAE, reported revenue of $2.657bn, down over 23 percent from 2019, with a drop of over 38 percent in net profit, from $735.2m to $451m.
The company, which ordered a halt to launching new projects in December, is currently developing over 26,000 residences in the UAE, alongside 12,000 units across international markets.
"Despite the challenges of the pandemic, we remained focused on progressing at great speed with all of our projects during 2020," said Alabbar.
As revealed last week, Emaar Malls witnessed a 25 percent drop in revenue for 2020, year-on-year, while profits tumbled by 69 percent as the company felt the full force of the coronavirus pandemic.
The shopping malls and retail business, which is majority-owned by Emaar Properties, saw revenues drop from $1.272bn in 2019 to $955m last year, while profits fell from $622m to $192m, as the industry was hit massively by Covid-19 lockdowns and curfews, followed by stringent social distancing guidelines during a gradual re-opening by the government aimed at curbing the spread of the virus.
Emaar’s hospitality and leisure, entertainment and commercial leasing business contributed $441m to the group’s total revenue.
A positive for the company, was the performance of its online fashion and beauty platform Namshi, which saw year-on-year revenues climb 28 percent to $358m in 2020. While Emaar’s international property development saw revenues increase 10 percent to $1.314bn, underpinned by “continued successful operations in Egypt and Pakistan”.
Emaar’s international operation delivered property sales of $1.247bn during 2020, a seven percent growth compared to 2019.