Dubai Holding group set for at least 20 per cent rise in profits

The forecast rise reflects strong trading conditions across the Dubai Holding Commercial Operations Group portfolio.

Dubai Properties in May announced plans to build the Mall of the World at an estimated cost of Dh25 billion over 10 years. Antonie Robertson / The National

Dubai Holding Commercial Operations Group (DHCOG), the non-financial arm of the government-owned conglomerate, is set for a full year profit rise of at least 20 per cent, according to a statement accompanying its half-year results.

The forecast rise reflects strong trading conditions across the DHCOG portfolio. The group, which owns the Jumeirah hotel chain, Tecom Investments business parks, the developer Dubai Properties Group and some telecoms interests, announced net profits ahead at Dh2.1billion for the six months to end June, on revenues also up at Dh5.6bn.

A spokeswoman for the company said there was no comparable figure for the half way stage in 2013 as this is the first time DHCOG has provided six-month financial results.

But Ahmad bin Byat, chief executive of the holding company, expects there will also be an improved financial performance in the second half. “We expect our annual net profits to exceed Dh4bn,” he said.

For the past full year, DHCOG made a net profit of Dh3.3bn, which was a big leap on 2012, when the group was still recovering from the effects of the global financial crisis.

All its business lines contributed to the 2014 net profit, he said.

Mohammad Abdulla Al Gergawi, the chairman of Dubai Holding, said: “Our ability to continue to generate solid earnings highlights both the strength of our financial position and the success of our strategy that is focused on investing in sectors vital to Dubai’s economic development. We are confident that our financial position will strengthen further once construction starts in the strategic projects we announced recently.”

This year, Dubai Holding announced plans to build the Mall of the World at an estimated cost of $6.8bn over 10 years, as well as other new property developments including 800 residential apartments.

Jumeirah announced plans to operate a luxury resort to be built on the island of Mauritius, and is pursuing other opportunities in Saudi Arabia and other parts of the Arabian Gulf, as well as expansion in its core Dubai hotels business.

Tecom, which last week confirmed it is in talks with bankers over a $1bn loan, is building phase 1 of D3, the Dubai Design District, as well as residential developments. “Its business parks continued to attract local, regional and international institutions,” DHCOG said.

Mr bin Byat said: “Our solid performance during the first half of 2014 comes as a direct result of our team’s dedication to enhance the group’s earnings and maintain a regular cash flow.”

He said: “The group focused its efforts on lowering its debt profile and maintaining an optimum debt to equity ratio. To that end, DHCOG utilised available liquidity to repay its €750m [Dh3.56 billion] bond in January, and voluntarily repaid the entire outstanding principal $319.3m of a [loan] originally maturing on December 31, 2015.”

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