Falling property values helped to push down profits for Dubai Investments by 65 per cent in the first quarter.
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The diversified conglomerate, with interests including dairy farms and industrial property, posted a profit of Dh100 million (US$27.2m) for the first quarter, compared with Dh289m in the same period last year. Earnings dropped to Dh0.03 a share, down from Dh0.08 a share a year ago. Shares in the company slipped 2.73 per cent in trading yesterday, down to 85.4 fils. The company's share price is down 12 per cent since last Wednesday.
It recorded declines across all four of its business segments, but was particularly hard hit by falls in the property sector, where profits fell 67 per cent, from Dh235m in the first quarter of last year to Dh77m. Gain on valuation of investment property fell 80 per cent, from Dh167m to Dh33m. Profit from investments dropped to Dh55m from Dh337m in the first quarter of last year, as revenue from the company's investment portfolio tumbled from Dh330m to Dh12 million in the same period this year.
Company officials did not return a call for comment yesterday.
Dubai Investments lists interests in 33 companies, making it one of the bellwethers of Dubai's economy. Its portfolio includes Emirates Float Glass, Marmum Dairy Farm, Dubai Cranes and Technical Services and Al Mujama Real Estate, as well as a range of manufacturing companies.
The company is in talks with banks to raise Dh1.2 billion, Khalid bin Kalban, its chief executive, said last month. The money will be used to expand the Emirates Float Glass plant and complete development of the Dubai Investments Park, Mr bin Kalban said.
The company has also announced plans to sell a 30 per cent stake in Masharie, its private equity unit, through an initial public offering.
At the end of last year, the company reported annual profit of Dh805m, a 17 per cent decline from 2009. It attributed the drop to "the general slowdown of the local economy which is yet to recover from the real estate crisis".
Company shareholders last month approved a 6 per cent cash dividend.
[ kbrass@thenational.ae ]