Emaar investors were left disappointed by its dividend payout, sending the stock tumbling almost 3 per cent on Thursday.
The company said it would pay a dividend of 15 per cent. It paid the same last year, but also offered one bonus share for every 10 held.
“The market was expecting 20 fils a share,” said Harshjit Oza, the assistant director for research at Naeem Brokerage. “Generally everyone expects Emaar to offer a dividend of the same level as the previous year or higher.”
Although Emaar paid investors an extra 11 per cent dividend worth a total of Dh9 billion after it listed its Emaar Malls Group, investors were expecting more. Several UAE banks have announced chunky dividends in recent weeks as high as 100 per cent in the case of the Abu Dhabi-based FGB.
“The problem for Emaar is that it is not like the banks,” Mr Oza added. “The banks do not need to go out and borrow money like Emaar does. Also Dubai is becoming an event driven market rather than a financially driven one so investors are looking for an excuse to dump stock due to the falling oil price and the problems with the Russian economy.”
Emaar said that shareholders would have the chance to ratify the board’s dividend decision at the annual general meeting set for April 15.
The news came as Emaar published a detailed version of its financial results for last year showing that revenue from apartment sales had plummeted by 64.7 per cent to Dh1.2 billion compared with Dh3.6bn in 2013.
However, revenue from other types of property increased during the year, the company said.
Revenue from villa sales increased 37 per cent last year rising to Dh1.8bn from Dh1.3bn in 2013 and revenue from shops, offices and plots of land more than doubled over the year to Dh1.4bn compared with Dh590 million in 2013.
Revenue from hospitality properties increased 10.9 per cent over the year to Dh1.6bn, and rental income from leased properties increased 12.2 per cent to Dh3.68 billion.
Last month Emaar reported a 14 per cent rise in fourth quarter profit to Dh861m as revenue rose 3 per cent.
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