Dar Al Arkan Real Estate Development Co., Saudi Arabia's biggest developer by market value, said Saturday first-quarter profit fell 6.1 percent year-on-year to SR398.6 million ($106.3 million) due lower profit margins from property sales. “The decline in net profit stems from a slight decrease in average profit margins from sales that was caused by the geographic location of sold products,” the company said in a statement on the Saudi bourse website. Operating income fell 8.2 percent to SR435.2 million in the first quarter from SR474.2 million a year earlier, while earnings per share came in at SR0.37 versus SR0.39. Dar Al Arkan needs a steady stream of financing and sales to deliver on large projects throughout Saudi Arabia. The property developer already paid back a SR2.25 billion Sukuk, or Islamic bond, earlier this year. It recently raised $450 million in a five-year Sukuk that pays a 10.75 percent annual coupon. The firm “shoulders a hefty debt burden, compounded by a lumpy debt-maturity profile,” Malaysian-based RAM Ratings said in a note in January. It added that the developer's outstanding debt stood at SR8.34 billion last year and is “subject to hefty Sukuk repayments in 2010 and 2012.”
