Dubai's Gulf General more than doubles Q3 profits

Dubai-based conglomerate GGICO reports strongly increased earnings in the past quarter following a start to the year marked by writedowns and losses.

DUBAI // Gulf General Investment Company, the Dubai-based conglomerate, has recovered from a stormy start to the year and more than doubled its profits during the last three months.

The group, which operates in the real estate, manufacturing and financial services sectors, recorded an increase in net profits of 140.46 per cent to Dh53m (US$14.4m), which the company's management said was driven by growth in its manufacturing and services operating companies.

However, revenues plunged 44.9 per cent to Dh596m during the same period.

Mohamed Al Sari, GGICO's managing director, said: "Most of our manufacturing and services operating companies contributed to the positive result of the group for the third quarter".

He added that the firm had now recovered from write-downs made earlier this year, which resulted in losses of 85m during the first quarter of the year.

Martin Kohlhase, an analyst at Moody's, said that GGICO's improved performance was a good sign for Dubai's economy.

"Bear in mind that, to a large degree, they're dependent on the Dubai real estate market and the other business lines had a large exposure to the UAE and the Middle East," he said.

The strong increase in profits was "probably a reflection of the Dubai economy growing again, albeit moderately," Mr Kohlhase said, adding that the company has traditionally reported stronger earnings in the second half of the year.

The credit ratings agency has given a B1 rating with a negative outlook to GGICO.