EMAAR Properties PJSC, the Middle East's largest real estate developer, is expected to report record quarterly profit as it sold more residential and business space in the United Arab Emirates, the Gulf's largest construction market.
Net income at the Dubai-based company probably rose 13 percent to 1.76 billion dirhams (US$479 million) in the second quarter from 1.56 billion dirhams a year earlier, according to the median estimate of five analysts surveyed by Bloomberg News.
Dubai residential property prices rose 40 percent in the year to May, according to the Al Mal Dubai Real Estate Price Index. Emaar, which is building the world's tallest tower in its home city, can book revenue from projects once they are 20 percent complete.
Profit will be "driven by higher UAE apartment and office space sales and the continued rise in rental and hospitality revenue," said Stefan Schurman, a Dubai-based analyst at EFG-Hermes Holding SAE.
The company's earnings are likely to be released this week.
The company has said it expects to complete the Burj Dubai tower, which will be more than 700 meters high, in September 2009. It plans to construct six hotels, a theme park and 1,200 apartments as part of the Las Vegas-style Bawadi project in the desert outside the city. The Dubai government owns 32 percent of the company.
Emaar has declined 31 percent this year, compared with the 9.8-percent drop in the Dubai Financial Market General Index. The stock fell 0.5 percent to 10.3 dirhams last Thursday, valuing the company at 62.7 billion dirhams. Emaar is the largest company by market value in Dubai.
Concern about the performance of the company's United States unit, California-based John Laing Homes, is "weighing on" the shares, said Loic Pelichet, a Dubai-based analyst for ING Groep NV.
Emaar bought John Laing in 2006 for US$1.05 billion, about a year after a five-year US housing boom peaked. The nation is now in its biggest housing slump since the Great Depression. Sales of new homes in the US dropped to a 512,000 annual pace in May, down 40 percent from the year before, the US Commerce Department said.