Shareholders angry at Emaar dividend proposal
Emaar Properties is proposing a 20% cash dividend, its chairman Mohammed Alabbar said today at the company's sixth annual general meeting (AGM)."The board of directors has recommended a 20 per cent cash dividend," Alabbar said at the meeting in Dubai. "We are not building a company for today or tomorrow, we are building a company for the future."Emaar would not distribute bonus shares, Alabbar said. "To give bonus shares is not acceptable."
Shareholders at the meeting reacted angrily to the proposal, asking Alabbar to increase the dividend.The announcement drew angry scenes from shareholders at the meeting, with one pointing at Alabbar and yelling "you're punishing us"."The largest segment of people investing in Emaar is small investors," one shareholder told Alabbar at the meeting. "You should take them into account and give us more."Some analysts had previously estimated that the dividend would be as high as 65%.Alabbar requested the shareholders' support and - upon asking who did not accept the proposed dividend - almost everyone in the crowd raised their hand.Voting on the issue is currently underway.If there is no quorum on the dividend proposal, the meeting will be rescheduled for March 18, the company said last month.The dividend announcement is important because Gulf Arab investors, their confidence battered by a crash last year, are punishing stocks of companies that fail to meet their dividend expectations. Emaar's silence on dividends in the weeks after its fourth profit report weighed on its stock.Emaar paid a cash dividend of 40 fils per share in 2005. Last month, investors quoted by Reuters estimated the latest dividend to range between 50 and 65 per cent.However, Amro Diab at the EFG-Hermes Brokerage in Dubai told ArabianBusiness.com earlier today that he did not expect the dividend payment to be impressive."I personally don't think it'll be much - I doubt they'll pay a big cash dividend," he correctly predicted."Investors [have not been] very comfortable with Emaar not announcing dividends," he added.The AGM, which was scheduled to begin at 5pm, began an hour later and is, according to ArabianBusiness.com reporters, 'very busy'. It is currently still underway at the Sheikh Rashid Hall, Dubai International Convention Centre.Other announcements at the meeting included the allocation of $2.9 billion for projects in 2007 in the UAE and abroad. Mohammed Alabbar said that $2.49 billion would be spent on domestic projects while the rest would be allocated to developments in markets including Syria, Pakistan, and India. It was not immediately clear if those were in addition to the value of projects announced earlier.The Dubai property giant says it plans to acquire one business a year in its worldwide expansion plans. It is keen on India, where it expects growth in the real estate sector to soar over the next eight years.The total value of Emaar's land at the end of 2006 was $18.44 billion, up 125% from 2005, according to an Emaar presentation at the meeting.In the UAE itself, the company has a land bank of 16.78 million square metres.The AGM will also declare transfers to reserves, seek the approval by the shareholders of Emaar's annual results and appoint auditors for 2007, according to a statement made by the company this morning.The company's current auditors, Ernst & Young, are present at the meeting.Emaar made a net profit of 6.371 billion dirhams ($1.74 billion) in 2006, up 35% from the previous year.The company transferred 10% of its profit to general reserves and will not be distributed to shareholders, according to a statement made by Emaar last month.Shares in Emaar Properties, the largest Arab property developer by market value, closed at AED12.70 today, down 0.78% ahead of this afternoon's expected dividend announcement.Emaar shares are down 5.6% since January 29th, when Emaar posted a 65% jump in fourth-quarter net profit. Emaar's share price tumbled 47.3 percent in 2006 as Dubai's stock market index fell 44.4 percent, the second-worst performer in the Gulf Arab region. Source
Shareholders at the meeting reacted angrily to the proposal, asking Alabbar to increase the dividend.The announcement drew angry scenes from shareholders at the meeting, with one pointing at Alabbar and yelling "you're punishing us"."The largest segment of people investing in Emaar is small investors," one shareholder told Alabbar at the meeting. "You should take them into account and give us more."Some analysts had previously estimated that the dividend would be as high as 65%.Alabbar requested the shareholders' support and - upon asking who did not accept the proposed dividend - almost everyone in the crowd raised their hand.Voting on the issue is currently underway.If there is no quorum on the dividend proposal, the meeting will be rescheduled for March 18, the company said last month.The dividend announcement is important because Gulf Arab investors, their confidence battered by a crash last year, are punishing stocks of companies that fail to meet their dividend expectations. Emaar's silence on dividends in the weeks after its fourth profit report weighed on its stock.Emaar paid a cash dividend of 40 fils per share in 2005. Last month, investors quoted by Reuters estimated the latest dividend to range between 50 and 65 per cent.However, Amro Diab at the EFG-Hermes Brokerage in Dubai told ArabianBusiness.com earlier today that he did not expect the dividend payment to be impressive."I personally don't think it'll be much - I doubt they'll pay a big cash dividend," he correctly predicted."Investors [have not been] very comfortable with Emaar not announcing dividends," he added.The AGM, which was scheduled to begin at 5pm, began an hour later and is, according to ArabianBusiness.com reporters, 'very busy'. It is currently still underway at the Sheikh Rashid Hall, Dubai International Convention Centre.Other announcements at the meeting included the allocation of $2.9 billion for projects in 2007 in the UAE and abroad. Mohammed Alabbar said that $2.49 billion would be spent on domestic projects while the rest would be allocated to developments in markets including Syria, Pakistan, and India. It was not immediately clear if those were in addition to the value of projects announced earlier.The Dubai property giant says it plans to acquire one business a year in its worldwide expansion plans. It is keen on India, where it expects growth in the real estate sector to soar over the next eight years.The total value of Emaar's land at the end of 2006 was $18.44 billion, up 125% from 2005, according to an Emaar presentation at the meeting.In the UAE itself, the company has a land bank of 16.78 million square metres.The AGM will also declare transfers to reserves, seek the approval by the shareholders of Emaar's annual results and appoint auditors for 2007, according to a statement made by the company this morning.The company's current auditors, Ernst & Young, are present at the meeting.Emaar made a net profit of 6.371 billion dirhams ($1.74 billion) in 2006, up 35% from the previous year.The company transferred 10% of its profit to general reserves and will not be distributed to shareholders, according to a statement made by Emaar last month.Shares in Emaar Properties, the largest Arab property developer by market value, closed at AED12.70 today, down 0.78% ahead of this afternoon's expected dividend announcement.Emaar shares are down 5.6% since January 29th, when Emaar posted a 65% jump in fourth-quarter net profit. Emaar's share price tumbled 47.3 percent in 2006 as Dubai's stock market index fell 44.4 percent, the second-worst performer in the Gulf Arab region. Source
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