Dubai's Emaar says Q1 profit up but revenue down

DUBAI (AFP) - Dubai-based Emaar properties, which is building the world's tallest skyscraper, said its first quarter net profit grew 14 percent but revenue fell 21 percent compared with the period one year ago.

Emaar, considered the world's largest property company in terms of market capitalization, said its net profit in the first quarter reached 1.5 billion dirhams (415 million dollars), a 14 percent growth over the 1.32 billion dirhams (363 million dollars) in the same period in 2005.

The publicly listed company, which is majority controlled by the government in the Gulf emirate of Dubai, however, said its revenue in the first quarter fell by 21 percent to 2.2 billion dirhams (613 million dollars) compared with the 2.8 billion dirhams (777 million dollars) it reported in the year-ago period.

It gave no explanation for the decline.

There has been concern among some analysts and investors in recent months that the company, which has been a driving force behind the Dubai building boom, may be getting ahead of itself and risks not finding enough customers for its projects.

Emaar, which reported a record 180 percent increase in annual profits in 2005, said it has committed 4.2 billion dollars this year for real estate investments in Saudi Arabia, India, Morocco and other foreign countries.

It will also spend 680 million dollars to build schools and hospitals in the United Arab Emirates, the seven-emirate federation that includes Dubai.

The company said work on its Burj Dubai development site was progressing "at a phenomenal rate."

"The second quarter of 2006 sees the handover of 'The Residences' to homeowners as well as the launch of more towers within the development," it said.

The 500-acre (202-hectare) residential and business complex in Dubai's centre will include the world's tallest tower when completed in 2008.

Emaar said the tower stood at 40 storeys as of Thursday and that one floor was being added each week.

It has been hesitant to say how tall the tower will be for fear of competition, but it is expected to stand some 800 metres (2,500 feet) high.

The company made no mention of a riot on March 21 by some 2,500 labourers at the Burj Dubai site protesting work conditions. Cars were smashed and equipment destroyed at the time, causing damage estimated at one million dollars.

It had issued a terse statement on March 23 saying that work on the tower was uninterrupted.