Dubai Investments is expecting a major decline in profit this year despite recently securing Dh700 million (US$129.5m) in loans to fund its portfolio of companies, the chief executive said yesterday.
"There were signs of recovery in 2010, but they were disturbed by the Arab Spring," said Khalid bin Kalban. "Companies were hoping that 2011 was supposed to be the last year of economic weakness, but I think it turned out to be the worst year since 2003."
Dubai Investments owns significant stakes in a total of 40 companies spread across the glass, food, pharmaceuticals, metals, rubber, property and financial industries, among others.
Those firms include Emirates Float Glass, Marmum Dairy Farm, Emirates Building Systems, Abu Dhabi Investment House and Al Mal Capital.
Mr bin Kalban said preliminary figures showed profits of just Dh270m for the first nine months of the year. That would equate to a profit of Dh31m for the third quarter, a fall of 85.5 per cent compared with the company's Dh213.6m in profits during last year's third quarter. The company has not yet disclosed its official results.
Mr bin Kalban attributed the expected drop in profit to higher provisions to buffer against more missed payments by customers.
"We have to take provisions for clients in Libya and Syria who have not paid due to the unrest," he said.
Before the Arab Spring, Dubai Investments had made a concerted effort to expand its focus beyond the GCC and into countries such as Egypt, Libya and Syria to take advantage of rising economic growth.
But that strategy backfired when unrest erupted, forcing businesses to put plans on hold and causing customers to default on payments.
Dubai Investments had a variety of interests and contracts in North Africa that were affected by the political turmoil, including a deal worth €80m (Dh407.7m) to build a "steel structure" at the Benghazi airport and a plan to open a 40 square kilometre business park along the lines of its Dubai Investments Park on the emirate's south-western fringe.
Mr bin Kalban said he hoped discussions could be revived on those projects once political stability returned to the country. For now, however, they were on hold as the company refocuses on manufacturing and exports to new markets.
"This all came to a halt," he said. "Now we are getting correspondence from the authorities saying we'd like to revive what was discussed earlier."
With the renewed focus on manufacturing, Mr bin Kalban said Dubai Investments had secured a Dh700m loan from local banks to help to expand its float-glass plant in Abu Dhabi. The plan is to borrow a total of Dh1.2 billion from banks, with the rest of the money coming from European banks once the company gets nearer to construction on other new projects, including in manufacturing and health care.
"Our manufacturing business is where our focus is now as far as Dubai Investments is concerned," he said.
Another of the company's subsidiaries, a private equity firm called Masharie, was contemplating a plan to raise its capital from Dh600m to Dh1bn, Mr bin Kalban said. The company, in which Dubai Investments has a 65 per cent holding, is planning to use that money to finance acquisitions, although no final decision had been made yet. A planned initial public offering of 30 per cent of Masharie continued to be on hold, he added, as trading on local stock markets remained thin.
Despite its declining profits, Dubai Investments was also looking at three new acquisitions for Dh250m - in the UAE, Saudi Arabia and Turkey, Mr bin Kalban said. They would be in the food processing, retail and personal care sectors.
The company's shares, which are listed on the Dubai Financial Market, fell 0.7 per cent per cent to close at 68.5 fils yesterday.
afitch@thenational.ae
The language of diplomacy in 1853
Treaty of Peace in Perpetuity Agreed Upon by the Chiefs of the Arabian Coast on Behalf of Themselves, Their Heirs and Successors Under the Mediation of the Resident of the Persian Gulf, 1853
(This treaty gave the region the name “Trucial States”.)
We, whose seals are hereunto affixed, Sheikh Sultan bin Suggar, Chief of Rassool-Kheimah, Sheikh Saeed bin Tahnoon, Chief of Aboo Dhebbee, Sheikh Saeed bin Buyte, Chief of Debay, Sheikh Hamid bin Rashed, Chief of Ejman, Sheikh Abdoola bin Rashed, Chief of Umm-ool-Keiweyn, having experienced for a series of years the benefits and advantages resulting from a maritime truce contracted amongst ourselves under the mediation of the Resident in the Persian Gulf and renewed from time to time up to the present period, and being fully impressed, therefore, with a sense of evil consequence formerly arising, from the prosecution of our feuds at sea, whereby our subjects and dependants were prevented from carrying on the pearl fishery in security, and were exposed to interruption and molestation when passing on their lawful occasions, accordingly, we, as aforesaid have determined, for ourselves, our heirs and successors, to conclude together a lasting and inviolable peace from this time forth in perpetuity.
Taken from Britain and Saudi Arabia, 1925-1939: the Imperial Oasis, by Clive Leatherdale
GIANT REVIEW
Starring: Amir El-Masry, Pierce Brosnan
Director: Athale
Rating: 4/5
UAE currency: the story behind the money in your pockets
RESULTS
5pm: Sweihan – Handicap (PA) Dh80,000 (Turf) 2,200m
Winner: Shamakh, Fernando Jara (jockey), Jean-Claude Picout (trainer)
5.30pm: Al Shamkha – Maiden (PA) Dh80,000 (T) 1,200m
Winner: Daad, Dane O’Neill, Jaber Bittar
6pm: Shakbout City – Maiden (PA) Dh80,000 (T) 1,200m
Winner: AF Ghayyar, Tadhg O’Shea, Ernst Oertel
6.30pm: Wathba Stallions Cup – Handicap (PA) Dh70,000 (T) 1,200m
Winner: Gold Silver, Sandro Paiva, Ibrahim Aseel
7pm: Masdar City – Handicap (PA) Dh80,000 (T) 1,400m
Winner: AF Musannef, Tadhg O’Shea, Ernst Oertel
7.30pm: Khalifa City – Maiden (TB) Dh80,000 (T) 1,400m
Winner: Ranchero, Patrick Cosgrave, Bhupat Seemar
Results
5pm: Wadi Nagab – Maiden (PA) Dh80,000 (Turf) 1,200m; Winner: Al Falaq, Antonio Fresu (jockey), Ahmed Al Shemaili (trainer)
5.30pm: Wadi Sidr – Handicap (PA) Dh80,000 (T) 1,200m; Winner: AF Majalis, Tadhg O’Shea, Ernst Oertel
6pm: Wathba Stallions Cup – Handicap (PA) Dh70,000 (T) 2,200m; Winner: AF Fakhama, Fernando Jara, Mohamed Daggash
6.30pm: Wadi Shees – Handicap (PA) Dh80,000 (T) 2,200m; Winner: Mutaqadim, Antonio Fresu, Ibrahim Al Hadhrami
7pm: Arabian Triple Crown Round-1 – Listed (PA) Dh230,000 (T) 1,600m; Winner: Bahar Muscat, Antonio Fresu, Ibrahim Al Hadhrami
7.30pm: Wadi Tayyibah – Maiden (TB) Dh80,000 (T) 1,600m; Winner: Poster Paint, Patrick Cosgrave, Bhupat Seemar
$1,000 award for 1,000 days on madrasa portal
Daily cash awards of $1,000 dollars will sweeten the Madrasa e-learning project by tempting more pupils to an education portal to deepen their understanding of math and sciences.
School children are required to watch an educational video each day and answer a question related to it. They then enter into a raffle draw for the $1,000 prize.
“We are targeting everyone who wants to learn. This will be $1,000 for 1,000 days so there will be a winner every day for 1,000 days,” said Sara Al Nuaimi, project manager of the Madrasa e-learning platform that was launched on Tuesday by the Vice President and Ruler of Dubai, to reach Arab pupils from kindergarten to grade 12 with educational videos.
“The objective of the Madrasa is to become the number one reference for all Arab students in the world. The 5,000 videos we have online is just the beginning, we have big ambitions. Today in the Arab world there are 50 million students. We want to reach everyone who is willing to learn.”
