Emaar Properties: A look at the Av. ROE drivers

Also, on TTM basis the company`s net income increased by 22.43 percent on the last twelve months ended 30 June 2017, realizing AED 5,595,14 million " AED 0.78 per share" as compared to the versus period of AED 4,569,49 million. The operating income advanced 16.17 percent to AED 5,410,93 million. Revenues increased 12.17 percent to AED 16,149,40 million. The main point is that, the company`s ROE revealed an increase from 11.92 to 13.48 percent through the last twelve months.
The average return on equity increased from 11.92 to 13.48 percent, such increase is  produced by the growth in return on net operating assets(RNOA) from 12.86 to 13.63 percent supported by the growth in NOPM and NOAT as well. On the same line, the company’s financial assets are greater than its financial debts, thus financial income is higher than financial expense and the company had a positive return on financing activities(RNFA) of 6.89 percent rather than net borrowing cost, the positive spread of 6.74 percent reduced the Av. ROE by (0.15), because some of shareholders’ equity is invested in financial assets which earned less than operating assets.

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