GGICO reports 74 per cent drop in profits

The property investment firm says the results were in line with expectations and that industrial subsidiaries had performed well.

Gulf General Investment Company (GGICO), a Dubai-based firm, today reported a 74 per cent drop in first-quarter earnings. The company, founded in Ajman in 1973, mainly buys and sells property, but also manufactures prefab houses and engages in trading activities ranging from oil to perfumes. The company said it had profits of Dh44 million (US10m) in the first quarter on sales of Dh1.4 billion.

"Our results are in line with the budget and all our industrial subsidiaries have performed well in the first quarter 2009 and will continue to perform better for the rest of the year. Diversification in industrial sectors is the key to our success in this challenging period," said Mohamed Al Sari, managing director at GGICO. The stock fell 3.4 per cent to Dh1.70 as the Dubai Financial Market General Index lost 1.1 per cent, its third consecutive decline.

GGICO said it had adopted a new accounting standard called IFRIC15 which lays out the rules when real estate developers can include the sales of off-plan units in their revenues. GGICO has invested in 4,500 residential units in the UAE and the Gulf region, including flagship projects such as the Dh1.3 billion Axis Residences at Dubai Silicon Oasis, which is expected to be handed over later in the year. [e-mail]