Earnings Report

Emaar Development

9M 26

1. Company Overview & Earnings Context

is a Dubai-based property development company and a subsidiary of Emaar Properties PJSC. Its principal activities are property development and development management services in the UAE.

The Group operates as a single reportable segment, focused on real estate development, and its operations are entirely within the UAE.

The 9M 2026 results show continued strong growth, supported by higher residential property revenue, improved gross profit and a substantial increase in the contribution from joint ventures. Net profit increased by 24.0% year on year to AED 10.79 billion.

An important development after the reporting period was announced on 4 November 2026: Emaar Properties stated its intention to make a voluntary cash offer of AED 15 per share to acquire shares in Emaar Development that it and its indirect wholly owned subsidiary do not already own. The offer remained subject to approval by the Parent Company's Board of Directors at the date of the interim report.

2. Financial Performance Snapshot

Nine-month financial performance

Financial metric	9M 2026	9M 2025	Change
Revenue	22,157.82	17,643.72	+25.6%
Cost of revenue	(9,898.79)	(7,770.18)	+27.3%
Gross profit	12,259.03	9,873.55	+24.2%
Selling, general and administrative expenses	(1,944.95)	(1,348.71)	+44.2%
Finance income	1,285.63	1,000.17	+28.5%
Finance cost	(187.03)	(143.67)	+30.2%
Other income	91.13	151.15	-39.7%
Share of results of joint ventures	1,009.30	255.67	+294.8%
Profit before tax	12,513.11	9,788.15	+27.8%
Income tax expense	(1,723.61)	(1,086.34)	+58.7%
Net profit	10,789.51	8,701.82	+24.0%
EPS (AED)	2.27	1.75	+29.7%

Third-quarter performance

Financial metric	Q3 2026	Q3 2025	Change
Revenue	8,821.28	7,713.98	+14.4%
Gross profit	4,735.97	4,358.26	+8.7%
Selling, general and administrative expenses	(674.54)	(568.51)	+18.7%
Finance income	451.33	365.40	+23.5%
Finance cost	(54.29)	(52.43)	+3.6%
Share of results of joint ventures	275.06	111.54	+146.6%
Profit before tax	4,754.42	4,280.99	+11.1%
Income tax expense	(671.60)	(282.77)	+137.5%
Net profit	4,082.82	3,998.22	+2.1%
EPS (AED)	0.88	0.81	+8.6%

Underlying performance

Revenue grew by 25.6%, with residential unit sales contributing the overwhelming majority of turnover. Gross profit increased by 24.2%, while the gross margin remained broadly stable at approximately 55.3%, compared with 56.0% in 9M 2025.

Profit before tax grew faster than revenue, supported by the strong increase in the share of profits from joint ventures and higher finance income.

However, net profit growth was slower than profit-before-tax growth because income tax expense increased by 58.7%. The Group's reported average effective tax rate rose to 13.8% from 11.1%, including the UAE Domestic Minimum Top-up Tax.

The third-quarter figures show a more moderate increase in net profit than the nine-month figures. Q3 net profit increased only 2.1%, despite revenue growth of 14.4%, partly reflecting higher operating expenses and tax charges.

3. Operating Performance & Major Programs

Residential property development

Residential unit sales were the principal source of revenue.

Revenue category	9M 2026	9M 2025	Change
Sale of residential units	20,967.04	16,509.96	+27.0%
Commercial units, plots of land and development services	1,190.78	1,133.77	+5.0%
Total revenue	22,157.82	17,643.72	+25.6%

Residential sales contributed approximately 94.6% of total revenue, demonstrating the Group's strong concentration in residential development.

The Group recognised AED 22,079.38 million of revenue over time and AED 78.44 million at a point in time. This reflects the importance of construction progress and the satisfaction of contractual performance obligations in revenue recognition.

Joint ventures – a major profit contributor

The share of results from joint ventures increased sharply to AED 1,009.30 million, compared with AED 255.67 million in 9M 2025.

The Group's disclosed joint-venture investments were:

Joint venture	Ownership	Investment at Sep 2026
Emaar Dubai South DWC LLC	50.00%	2,346.03
Zabeel Square LLC	50.00%	324.75
Old Town Views LLC	61.25%	6.73
Total		2,677.50

Emaar Dubai South DWC LLC represents the largest investment. The increase in joint-venture earnings was one of the important contributors to the Group's profit growth during the period.

The Group also provided AED 919.83 million in loans to joint ventures. These loans are unsecured, non-interest-bearing and repayable according to their agreements.

Development pipeline and construction activity

Development properties increased to AED 22,277.71 million at 30 September 2026 from AED 21,485.93 million at the beginning of the year.

During the nine-month period:

Development costs incurred: AED 10,690.58 million.
Costs transferred to cost of revenue: AED 9,898.79 million.
Closing development properties: AED 22,277.71 million.

This indicates continued investment in projects under development and supports the Group's future revenue recognition pipeline.

The Group also stated that its operations remained supported by a strong backlog, ongoing construction activity and customer collections broadly in line with expectations. However, the interim financial statements do not quantify the total sales backlog or the value of unrecognised contracted revenue.

4. Key Performance Drivers

1. Strong residential revenue growth

Residential unit sales increased by 27.0%, contributing most of the Group's overall revenue growth. This was the primary driver of higher gross profit.

2. Significant growth in joint-venture earnings

The share of joint-venture profits increased from AED 255.67 million to AED 1,009.30 million. This provided a substantial additional contribution to profit before tax.

3. Higher finance income

Finance income increased by 28.5% to AED 1,285.63 million. The main component was interest earned on fixed and call deposits, which increased to AED 1,152.17 million from AED 865.28 million.

This reflects the Group's significant liquidity position and its ability to generate returns on customer collections and available cash.

4. Increase in operating expenses

Selling, general and administrative expenses rose by 44.2% to AED 1,944.95 million.

Important components included:

Sales and marketing expenses: AED 723.90 million versus AED 490.45 million.
Donations: AED 200 million, compared with none in the previous-year period.
Payroll and related expenses: AED 169.87 million versus AED 143.58 million.
Other expenses: AED 792.74 million versus AED 637.01 million.

The AED 200 million donation was approved by the Investment Committee following a special resolution at the Annual General Meeting held on 26 March 2026. This is a notable non-recurring element within the expense base.

5. Higher tax expense

Income tax expense increased to AED 1,723.61 million from AED 1,086.34 million.

The charge included:

Current income tax expense: AED 777.58 million.
UAE Domestic Minimum Top-up Tax: AED 946.03 million.

The Group's average effective tax rate increased to 13.8% from 11.1%. The domestic minimum top-up tax is an important factor to consider when assessing the conversion of profit before tax into net profit.

6. Regional geopolitical developments

Management discussed the regional conflict involving the United States, Israel and Iran and its potential impact on GCC economic activity and market sentiment.

Management stated that it had not identified a material adverse impact on the Group's business, financial performance, liquidity or asset valuations as at the reporting date. It cited the strong backlog, ongoing construction activity and customer collections as supporting factors.

This remains a risk to monitor because the report acknowledges that the longer-term impact of regional developments is uncertain.

5. Balance Sheet, Backlog & Cash Flow

Key balance-sheet and liquidity observations

The extracted financial statements provide detailed disclosures for several major asset and liability categories. The statement of financial position's complete total-asset and total-liability figures are not available in the readable extract, so I have not reproduced or estimated those totals.

Balance-sheet item	30 Sep 2026	31 Dec 2025
Development properties	22,277.71	21,485.93
Trade and unbilled receivables	7,529.70	7,566.55
Other assets, receivables, deposits and prepayments	9,654.04	7,995.68
Investments in joint ventures	2,677.50	1,669.93
Loans to joint ventures	919.83	841.18
Short-term deposits with original maturity over three months	8,943.75	1,505.36
Cash and cash equivalents	39,787.26	39,804.39
Trade and other payables	9,822.17	10,148.88
Interest-bearing loans and borrowings	3.67	3.67

Liquidity and cash position

Cash and cash equivalents stood at AED 39.79 billion, broadly unchanged from AED 39.80 billion at 31 December 2025.

An additional AED 8.94 billion was held in fixed deposits with original maturities of more than three months.

A significant part of the cash balance is associated with customer advances: AED 36.28 billion was held in bank accounts against advances received from customers on the sale of development properties and deposited into escrow accounts. These balances were disclosed as not being under lien.

This distinction matters: the headline cash balance is substantial, but a large proportion is linked to customer advances and project-related obligations rather than being unrestricted corporate cash.

Borrowings and debt

Interest-bearing loans and borrowings were AED 3.67 million at 30 September 2026, unchanged from year-end 2025.

The Group disclosed two facilities aggregating AED 3,673 million, renewed for five years until September 2030 and carrying rates of one- or three-month EIBOR plus a margin. The outstanding amount reported was AED 3.673 million, with the facilities guaranteed by the Parent Company.

The Group therefore reports a very small outstanding interest-bearing loan balance relative to its cash and deposit position.

Operating cash-flow performance

Cash-flow metric	9M 2026	9M 2025
Cash from operations before working-capital changes	10,416.83	8,686.76
Cash generated from operations	11,038.70	15,329.13
Net cash from operating activities	10,375.30	15,185.93
Net cash used in investing activities	(6,336.10)	891.13
Net cash used in financing activities	(4,056.34)	(4,589.67)
Net decrease in cash and cash equivalents	(0.02)	–
Closing cash and cash equivalents	39,787.26	35,057.01

Operating cash flow declined by approximately 31.7% year on year, despite higher reported profit.

The main working-capital movements included:

Advances from customers increased cash flow by AED 3,763.10 million.
Other assets, receivables, deposits and prepayments absorbed AED 1,576.03 million.
Trade and other payables absorbed AED 1,487.78 million.
Development properties absorbed AED 789.05 million.

The investing cash outflow was largely due to AED 7,438.38 million placed in deposits maturing after three months. This represents a movement of funds into longer-maturity deposits, rather than simply an operating cash drain.

Financing cash outflow mainly reflected the AED 4 billion dividend paid to shareholders during the period.

Backlog, commitments and contingencies

The Group disclosed total commitments of AED 21,624.68 million, compared with AED 20,815.40 million at 31 December 2025.

These commitments represent contracts entered into by the Group, including contracts for the purchase of land, net of invoices received and accruals made at the reporting date.

Other important disclosures:

Performance guarantee to Dubai's Real Estate Regulatory Authority: AED 4,089.95 million.
The Group has a commitment under the Mina Rashid Properties development agreement to pay 30% of project-life-cycle profits to the non-controlling shareholder.
Contractor claims exist in the ordinary course of business; management expects no material unprovided liabilities to arise.

The commitments figure is not the same as a sales backlog. It represents contractual expenditure and project-related commitments.

6. Investor Takeaway

Emaar Development delivered a strong 9M 2026 performance, with revenue increasing by 25.6% and net profit rising by 24.0% to AED 10.79 billion.

The principal growth drivers were higher residential unit sales, improved gross profit and a substantial increase in the contribution from joint ventures. The Group also maintained a sizeable liquidity position, with AED 39.79 billion in cash and cash equivalents and AED 8.94 billion in additional fixed deposits.

However, the results also highlight several points investors should monitor. Operating cash flow declined year on year, administrative expenses increased, and the effective tax rate rose. A substantial part of the cash balance is held against customer advances in escrow accounts, so it should not all be viewed as freely available corporate cash.

Positive factors

Revenue growth of 25.6%, driven primarily by residential sales.
Net profit growth of 24.0%.
Strong gross profit of AED 12.26 billion.
Joint-venture profit contribution increased significantly.
Large cash and deposit balances.
Very low reported outstanding interest-bearing borrowings.
Development properties increased, supporting ongoing project activity.
Management reported a strong backlog and customer collections broadly in line with expectations.

Key risks and areas to monitor

Operating cash flow declined by 31.7%.
Selling, general and administrative expenses increased by 44.2%.
Higher income tax expense and the UAE Domestic Minimum Top-up Tax.
Significant cash balances are linked to customer advances and escrow accounts.
Commitments increased to AED 21.62 billion.
Exposure to regional geopolitical developments and their potential impact on demand, construction and market sentiment.
The proposed AED 15-per-share voluntary offer by Emaar Properties, which remains subject to the relevant approval process.

Auditor review: Unmodified conclusion

Ernst & Young Middle East (Dubai Branch) reviewed the interim condensed consolidated financial statements under ISRE 2410 and concluded that nothing had come to its attention indicating that the statements were not prepared, in all material respects, in accordance with IAS 34. The review report was dated 5 November 2026.

This is an interim review rather than a full statutory audit opinion. The Group also stated that its 9M results are not necessarily indicative of the full-year outcome.

Overall view: Emaar Development's operating and earnings performance remains strong, supported by residential demand, project execution and joint-venture contributions. Its cash and deposit position provides financial flexibility, although the distinction between customer-backed escrow balances and unrestricted liquidity is important. Investors should focus on the sustainability of residential sales, joint-venture profitability, operating cash conversion, tax costs and the implications of the proposed parent-company offer.