Revenue – AED1,129mn, +29% Y-o-Y, +6% Q-o-Q, -1.0% vs. EFGe
EBITDA – AED710mn, +12% Y-o-Y, -2% Q-o-Q, -5.3% vs EFGe
Net income – AED537mn, +10% Y-o-Y, -3% Q-o-Q, -3.5% vs EFGe
 
Emaar Malls Group (EMG) reported its 3Q18 headline financial and operating figures yesterday. Overall, numbers came roughly in line with our estimates, with a slight miss at the top line and margins. Revenue was up 29% Y-o-Y, and 6% Q-o-Q, coming in at AED1,129mn – roughly in line with our estimate at AED1,141mn. Namshi reported revenue of AED223mn, its highest recorded sales number since its acquisition and beating our estimates by 22%, while rental revenue missed our estimate by 5.3% coming in at AED906mn . EBITDA margin was almost flat sequentially and slightly missing our estimate by 2.7ppt. Earnings were up 10% Y-o-Y and in roughly line with our estimate at AED548mn (-3.5% vs EFGe). We await the release of the full financial statements and presentation for more details. 
   
Results Highlights 
-        Occupancy level across EMG’s assets averaged 93% in 9M18 (94% in 2017)
-        Total number of visitors came in at 99mn, with The Dubai Mall alone recording 60mn (+4% Y-o-Y) 
-        Revenue grew by 29% Y-o-Y to AED1,129mn (+6.0% Q-o-Q, -1.0% vs EFGe), primarily due to the consolidation of revenues from Namshi; the online fashion retailer recorded AED176mn in sales in 1Q18 (AED197mn in EFGe), up 23% Y-o-Y 
-        EBITDA margin came in sequentially flat Q-o-Q to 62.9% in 3Q18 (3Q17: 81.0%, EFGe: 65.7%); we think it is more relevant to compare EMG’s margins on a sequential basis when assessing performance this year in order to avoid an unfavarouble base effect from pre-Namshi acquisition numbers. Gross profit margin (GPM) and EBITDA margin were roughly unchanged Q-o-Q
-        Net income came roughly in line with our estimate at AED537mn (+1.6% Y-o-Y, -5.4% Q-o-Q, -3.5% vs EFGe)
 
Emaar Malls Group (DU): AED1.84 as of 5 Nov. 2018, Rating: Buy, TP: AED3.00/share, MCap: USD6,418mn, EMAARMLS UH/EMAA.DU

Mai Attia