UAE. Emaar Properties the largest Arab real estate developer, has
proposed a 2007 dividend of AED0.20 (US$0.054) per share, a move that
may disappoint individual investors.
The remaining profit will be allocated to reserves, by market value
the company said in a statement on Tuesday on the Dubai bourse website.
Emaar also proposed a policy of offering shareholders an annual 20%
of profits for the next several years. Shareholders meet on 19 March to
discuss the ideas.
"Small investors will be disappointed because they expect surprises
to drive up the share price," said Mohammed Yasin, Managing Director at
SHUAA Securities. "Also, what could be perceived as negative is the
suggestion that the 20% dividend would be constant."
Last year, a similar 20% cash dividend disappointed investors,
sending Emaar shares plunging more than 5% the next day. The stock is
down about 24% this year, the worst performance in the Dubai index.
Emaar reported last month a 3% growth in annual net profits reaching AED6.575 billion (US$1.79 billion) for 2007.
The figure is up from AED6.371 billion (US$ 1.73 billion) recorded
in 2006 and is in spite of significantly lower land sales and the slow
down of the US real estate sector during 2007.
Annual revenue increased by 25% to AED17.566 billion (US$4.78
billion) compared to AED14 billion (US$3.81 billion) in 2006. Earnings
per share (EPS) for the year 2007 was AED1.08 (US$ 0.29) compared to
AED1.05 (US$ 0.29) in 2006.
Investment bank EFG-Hermes in January cut its fair value target for
Emaar after the developer said profit growth this year would stagnate
on higher construction costs for its shopping malls and hotels.
Foreign investors can own up to 49% of Emaar's stock.
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