Emaar Properties PJSC reported a considerable increase in first-half profitability, supported by strong real estate sales and improved recurring revenue business performance.
This performance is evidence of consumers’ sustained trust in the Emaar brand and of Dubai’s economy’s broader post-pandemic recovery, which was driven by the real estate market.
Emaar reported high first-half revenue of AED13.575 billion (US$3.696 billion), a growth of 10% compared to H1 2021, driven by the robust performance of its main property development sector and supported by rising recurring revenue operations. As a result of stronger sales with improving margins and ongoing cost optimization, H1 2022 profits before interest, taxes, depreciation, and amortization (EBITDA) increased by 66 percent to AED 6.112 billion (US$1.664 billion) from H1 2021.
Emaar achieved record first half group property sales of AED17.672 billion (US$4.811 billion), an increase of 5% compared to the H1 2021 sales of AED16.842 billion (US$4.585 billion). This was the result of successful property launches by Emaar in both the UAE and international markets, as well as a concerted focus on sales of under-construction projects.
Emaar’s EBITDA increased by 53% to AED2.932 billion (US$798 million) in the second quarter of 2022 from AED1.922 billion (US$523 million) in the same quarter of 2021. Emaar’s revenue for the second quarter of 2022 was AED6.940 billion ($1.889 billion), up 8% from Q2 2021 revenue of AED6.439 billion ($1.753 billion).
Emaar’s solid financial position further demonstrates its ability to maintain high revenue, profitability, and shareholder return in the near future. At the end of the first quarter of 2022, the company had a strong property sales backlog worth AED47.982 billion (US$13.063 billion), which will be recognized as revenue in the future.
An Emaar spokesperson said, “We have delivered strong second-quarter results of Emaar by successfully carrying on the momentum built during the first quarter of 2022. Thanks to the post-pandemic uptick in the real estate market and strong recovery of our mall, hospitality, and retail assets which increased our second-quarter profit this year, in comparison to the same period in 2021.
“On a macro-economic level, Dubai’s growing economy and recent changes in areas such as commercial companies law and visa regulations are driving growth and attracting investment across many sectors, which indirectly increases demand for our products, underpinned by our continued focus on delivering high-quality products and experiences that surpass our customers’ expectations.”
Emaar constantly provides premium experiences and lifestyle options across market sectors, and its integrated masterplan developments continue to be well-liked with local and foreign investors. Emaar has a well-established reputation for excellence in design, build quality and innovation.
In the first half of 2022, Emaar’s overseas real estate activities sold properties worth AED2.428 billion (US$661 million) and generated AED2.068 billion (US$563 million), or 15% of the company’s total income, mostly as a result of profitable ventures in Egypt and India.
Emaar Malls Management LLC, the wholly owned shopping malls and retail division of Emaar Properties, reported a 30 percent increase in H1 2022 revenue compared to the same period the previous year, reaching AED2.661 billion (US$725 million). This growth was driven by record tenant sales in H1 2022 at The Dubai Mall, which exceeded 2019 pre-Covid tenant sales. Emaar Mall Management outperformed H1 2021 by 66 percent with H1 EBITDA of AED1.644 million (US$448 million). Emaar Malls Management’s assets are currently 94 percent leased.
Emaar’s hotel, leisure, entertainment, and commercial leasing companies generated AED1.564 million (US$426 million) in revenue for the first half of 2022, an increase of over 93 percent from the first half of 2021. Emaar’s hotels in the UAE, comprising joint venture and managed properties, boast average occupancy rates of 71%, providing another evidence of the GCC tourism industry’s robust post-pandemic rebound.
Malls, hospitality, leisure, entertainment, and commercial leasing, which together generate recurring revenue for Emaar, recorded H1 2022 revenue of AED4.224 billion (US$1.150 billion) and EBITDA of AED2.955 billion (US$805 million), representing growth of 48 percent and 78 percent, respectively, over the same period in 2017. These companies account for 31% and 48%, respectively, of Emaar’s total revenue and EBITDA.