Emaar Saudi unit's losses increase by 180% in Q2

Saudi developer Emaar Economic City, an affiliate of Dubai-based Emaar Properties, said second-quarter losses increased by 180 per cent due to higher costs.

Emaar Economic City, which is developing the giant King Abdullah Economic City (KAEC) project on Saudi Arabia's Red Sea coast, posted a quarterly net loss of SR113 million (Dh110m) compared to SR40m a year ago, the firm said in a statement. It cited rising costs due to long-term provisions for building maintenance and the use of some deposits for project development.

Emaar Economic City's operational losses rose to SR110.2m in the second quarter of this year after SR74.8m in the same period a year ago, it said. KAEC is the most prominent among a series of "economic cities" that are part of Saudi Arabia's plan to diversify the country's oil and gas-based economy and provide more jobs for the country's growing population.

Emaar Economic City faced some delays delivering housing and business units, as well as a six-to-12 month delay on the first phase of the city's port, which it expects to complete in 2011.

Fahd Al Sharif, Chief Executive Officer of Emaar EC, said in April this year that KAEC will offer 2,000 housing units, which are under construction, for the high-income people.

"We will implement residential projects for the medium-income people within the next three months. We have also plans to build some 60,000 housing units for the limited income-people, and each of this housing unit would cost SR500,000 or less," he said, adding that nearly 60 per cent of the housing units at KAEC are meant for the medium- and limited-income groups. More than 45 per cent of the Saudi population is under the age of 15, and only 10 per cent of Saudis have their own homes. The kingdom needs nearly 1.3 million housing units until the year 2015 and the Saudi population is in demand for five million jobs until the year 2020, said Al Sharif.

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