Writedown stalls profit momentum for Dubai’s Emaar Properties

Dubai’s Emaar Properties, builder of the world’s tallest tower, reported near-flat quarterly net profit on Wednesday after taking a writedown related to a fire at one of its hotels on New Year’s Eve.

The $82 million writedown stalled an earnings boom at the government-linked developer, which had reported rising net income in the preceding 10 quarters.

Emaar made a net profit of $280 mln in the three months to Dec. 31, down from $290 mln a year earlier, a bourse statement said.

An analyst at SICO Bahrain had forecast Emaar’s fourth-quarter profit at $294 mln.

The writedown related to the fire at the Address Downtown hotel. Previous company documents show that, of the six Emaar hotels for which it provided a detailed breakdown, the Address Downtown commanded the most expensive average daily rate and highest occupancy in the first nine months of 2015.

Emaar said that accounting rules required it to recognise the write-off in the year the loss occurred, but it can record subsequent insurance payouts as income.

“The hotel is completely insured and the company is confident of recovery of loss from the insurance,” Emaar said.

Its hospitality and leisure unit’s annual revenue was $450 million, accounting for 12 percent of the company’s total revenue of $3.72 bln.