UAE investment bank Rasmala on Wednesday cut the target price of Dubai-based real estate giant Emaar Properties on what it termed “weak international handovers outlook.” The bank, however, maintained a ‘Buy’ rating on the firm “as valuation looks attractive at current levels and Emaar currently trades near our recurring income portfolio valuation of Dh2.44”.
In addition, the bank said that it reckons Emaar will seek refinancing options to service Dh12.2 billion worth of debt repayments, planned capital expenditure and interest payments between now and the end of next year. “Emaar has debt repayments of about Dh6.7bn over 2H11-2012. We expect the company to incur capex of Dh2.6bn on its projects and operating expenses and interest cost of Dh2.9bn in the same period. Thus, the total cash requirement is Dh12.2bn in 2H11-2012,” analyst Saud Masud at Rasmala wrote in the report.
“We expect Emaar to generate Dh7.7bn cash from its operations, which along with existing cash and FDs would result in a total liquidity of Dh12.9bn. Considering a minimum dividend payout of 10 per cent (Dh0.6bn), we estimate a total near-term refinancing requirement of about Dh1bn, although Emaar has denied recent media reports that the company is looking at financing options,” the investment bank said.
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