“Overall, we don’t see much on the upside, with the exception of Emaar Properties,” said Jad Abbas, equity analyst at EFG-Hermes in Dubai. “We are looking at a good quarter for Emaar and earnings are expected to be driven by deliveries of properties from Burj Khalifa,” he added.

The Egyptian bank is forecasting a net profit of Dh1.9 billion ($517.4 million) for the quarter for the Arab world’s largest listed developer, compared with a loss of Dh1.29 billion in the same period last year.

Emaar said in April it would focus on expanding in the Middle East, North Africa and South Asia in 2010, after its first-quarter profit more than tripled, boosted by revenues from its hospitality and retail businesses.

EFG expects Dubai’s second-largest developer by market capitalisation, Deyaar, to suffer the biggest slump in profit among UAE property and construction firms due to fewer deliveries of homes in the quarter than last year, Abbas said.

The bank is expecting Deyaar to report a net profit of Dh19 million, down 75 per cent on a year earlier. Deyaar reported a first-quarter loss of Dh100 million on the back of provisions.

Union Properties will likely record a profit of Dh33 million, reversing a loss in the same period last year, mainly on the completion of handovers at its Motor City project, he said.

Dubai construction firms are seen suffering this quarter, with Drake and Scull International’s second-quarter net profit seen falling 48 per cent to Dh45 million, according to Securities and Investment Company (SICO) in Bahrain, while EFG sees Arabtec’s net profit easing 26 per cent to Dh136 million. “For Dubai-based construction companies, it is expected to be a weak quarter year-on-year due to the expected slowdown in construction activity and pressure on margins,” said Ambereen Jiwani, research analyst
 at SICO.

Abu Dhabi suffering

Abu Dhabi’s two largest developers by market capitalisation could slip into the red in the second quarter, according to HC Securities, which forecasts a loss of Dh203 million for Aldar Properties and Dh6 million for Sorouh Real Estate.

“For Aldar and Sorouh we don’t expect any major deliveries in the second quarter,” said Majed Azzam, real estate analyst at HC Securities. “For Aldar specifically they had a lot of revaluation gains last year which I don’t expect them to achieve this quarter because they are not starting work on any new plots of land or completing any assets. For Sorouh further land sales this quarter are unlikely,” he added.

Sorouh’s profit rose 1 per cent in the first quarter from the same period a year ago, driven by the sale of its Shams Abu Dhabi plot and a rise in lease income. “During second quarter in 2009, the company had significantly higher land sales mainly due to the sale of 11 plots on Saraya and one plot on Shams Abu Dhabi projects. We do not think the company will be able to repeat its performance this year,” SICO’s Jiwani said. SICO forecasts a net profit of Dh68.8 million, down 53.6 per cent from the same period 
last year. —