Emaar Economic City reports loss from lower margins

20/10/2016 05:21 AST

The Saudi developer Emaar the Economic City (EEC) reported a third quarter loss of 81 million riyals, attributable to lower profit margins and rising expenses and depreciation costs.

EEC, the developer behind King Abdullah Economic City, said its bottom line, which fell from an 8m riyal profit in the same period last year, was also impacted by a change in an infrastructure cost estimate of residential land, and a recent court ruling relating to the sale of a development property.

Revenue rose 95 per cent year-on-year to 332.2m riyals. The developer last month agreed to a 2.7bn riyal Islamic loan for the financing of the second phase of the King Abdullah Port.Emaar Economic City is the Tadawul-listed developer of King Abdullah Economic City (KAEC) on the Red Sea coast north of Jeddah. The new city is to cover 181 square kilometres and cost US$100m.

In February, the KAEC chief executive, Fahd Al Rasheed, said the new city's master plan was being reassessed in light of the emergence of driverless cars and the internet of things. The master plan has undergone several revisions since the city was announced in 2005.

Mr Al Rasheed said in February that the first decade of the city's development had focused on infrastructure.

Through mid-day on Wednesday, Emaar Economic City's shares were down 8.4 per cent for the year to date, versus a drop of 20.6 per cent for the Tadawul index.

EEC's shares opened up about a quarter of a per cent at 12.10 riyals on Wednesday. Dubai's Emaar Properties owns a 33 per cent stake in Emaar Economic City.

The National