RIYADH: Saudi property developer Dar Al-Arkan said net profit fell 10 percent in 2009 after it focused on lower income apartments, seen as accounting for the bulk of a large housing deficit in the Kingdom.
The company, Saudi Arabia’s largest developer by market value, made SR2.12 billion ($566 million) in 2009, down from SR2.36 billion a year earlier.
The company posted a lower-than-expected 7 percent rise in net profit for the fourth-quarter of 2009. It made SR463.7 million in the three months to end-December, up from SR433.2 million a year earlier.
Analysts were expecting a fourth-quarter net profit of between SR311 million and SR660.7 million in a Reuters survey earlier this month.
“The majority of the units sold (in 2009) were apartments ... The price of these units is less than that of villas which represented the majority of the mix of units sold in 2008,” it said in a statement posted on the bourse website.
Benoit Bellerose, the firm’s chief financial officer, said the decline was normal because the firm’s main source of income in 2009 was a giant project in Riyadh aimed at targeting the middle and lower segments of the middle class.
“This is just about the timing of projects. In 2008 we had a project that focused mainly on the middle of the middle range which is why profit was higher,” he told Reuters by telephone.
Earnings per share for 2009 fell to SR1.97 down from SR2.18 in 2008, adjusted for a 50-percent capital increase in July.
Operating profit in 2009 fell 12.3 percent to SR2.32 billion while it fell for the fourth quarter by an annual 2.9 percent to SR512.9 million. Revenues slid 2.6 percent in 2009 to SR5.46 billion while annual costs fell 6.9 percent to 2.96 billion.
The Saudi property market is less developed compared to some neighboring states.
