|By Matt Smith| 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 301 million dirham ($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 1.03 billion dirhams in the three months to Dec. 31, down from 1.05 billion dirhams a year earlier, a bourse statement said.
An analyst at SICO Bahrain had forecast Emaar’s fourth-quarter profit would be 1.08 billion dirhams.
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 1.67 billion dirhams, accounting for 12 percent of the company’s total revenue of 13.67 billion dirhams.
The company also restated its 2014 results following its adoption of new accounting standards. This increased its 2014 fourth-quarter profit by about 20 percent from 861 million dirhams previously.
Emaar’s quarterly revenue was 3.81 billion dirhams, against 2.41 billion a year earlier.
The developer’s 2015 profit was 4.08 billion dirhams, up from 3.67 billion dirhams in 2014.-Reuters