DUBAI: Dubai-based Emaar Properties warned third quarter profits for one of its US-based subsidiaries would be below earlier forecasts due to the subprime mortgage crisis, a newspaper reported Wednesday.
Third-quarter JLH (John Laing Homes) results are going to be lower than earlier estimates – not incurring losses, but profits won t be high, Emaar s chief financial officer, Amit Jain, told The Khaleej Times without giving further details.
In June last year, Emaar said it paid $1.05 billion in an all-cash transaction to acquire John Laing Homes, the second largest privately held homebuilder in the United States.
Emaar shares tumbled to a 28-month low on Sunday as foreign investors seeking safer assets sold the stock, fearing mortgage defaults would hurt it operations in the United States.
US home loan woes sent stock exchanges worldwide reeling this month as US borrowers with risky credit histories – the so-called subprime sector – faced with falling house prices and rising interest rates defaulted on their mortgage repayments.
The Dubai-based property developer posted last month a first half net profit of $893 million for an on-year rise of seven percent.
Emaar s major projects include the sprawling Dubai Mall and Burj Dubai, a tower which the company says is on course to becoming the world s tallest building.
Beyond Dubai, Emaar is involved in multi-billion-dollar construction projects in Saudi Arabia, Jordan, and Egypt.
