Dubai Holding unit profit up 488% to Dh1.2bn
Dubai Holding, a global investment holding company, today announced the financial results for its business group, Dubai Holding Commercial Operations Group (DHCOG), for the fiscal year ending 31 December 2012, posting net profit of Dh1.2 billion in 2012 as compared to Dh204 million in the previous year, an increase of 488 per cent.
Mohammad Abdulla Al Gergawi, Chairman of Dubai Holding, said: “Our turnaround strategy has made considerable strides in 2012 and our businesses across the commercial operations group are increasingly well positioned. This, together with the strengthening of Dubai as the region’s financial, business and tourism hub, gives me confidence that we are set for the next phase of future growth.”
He praised efforts of the management team, led by Ahmad Bin Byat, which focused on improving the operational and financial performance of DHCOG during the last two years.
Ahmad Bin Byat, Chief Executive Officer of Dubai Holding, said: “Over the last few years, we have focused our strategy on driving revenue, improving operations across all of our businesses and addressing our financial commitments. The results of this strategy are increasingly evident in our numbers and are testament to the Group’s overall recovery. We will continue supporting our business lines, all of which continue to progress positively in the strengthening market environment.”
DHCOG’s total revenues for 2012 increased to Dh9.2 billion of which Dh6.3bn were recurring revenues (2011: Dh8.8bn and Dh6bn respectively). Net profits also grew considerably to Dh1.2bn in 2012 compared to Dh204m in 2011 due to an increase in revenues, tighter cost control and reduction in impairment charges.
DHCOG’s total assets stood at Dh86.33 billion and the Group continues to deleverage, having successfully paid down a $500 million bond in February 2012. DHCOG concluded the year with a healthy cash balance of Dh1.7bn.
Total DHCOG debt currently stands at Dh11.7bn, a reduction during the course of 2012 of Dh1.1bn, thereby improving the debt to equity ratio to 0.80. Contractor liabilities of Dh2.1bn were settled. Overall current liabilities decreased by 20 per cent.
DHCOG’s improved operating performance and financial position resulted in Moody’s Investors Service and Fitch Ratings reaffirming their stable outlook for DHCOG in 2013.
Operational highlights and outlook
Jumeirah Group’s strong and outstanding performance during 2012 was marked by the launch of five hotels across Europe and the UAE, and a 3.8 per cent increase in overall Revenue Per Available Room (‘RevPAR’) compared to 2011. Jumeirah’s portfolio of owned hotels recorded extended periods of full occupancy, with occupancy averaging at 73.2 per cent during 2012, with the last quarter of the year averaging 80 per cent. As a result, Jumeirah achieved a substantial growth in its room as well as food and beverage revenues.
Jumeirah will continue to focus on driving profitable revenues from its existing portfolio of luxury hotels, resorts and restaurants, while optimizing costs, and generating a strong flow of management fees with the opening of new luxury hotels. Jumeirah will also continue its dynamic international expansion of new hotel operations with a pipeline of 16 hotels in negotiation.
Tecom Investments continued to enhance its service offerings throughout 2012 resulting in yet another strong year across its business parks. Tecom’s performance in 2012 was driven by stable revenues and improved occupancy rates. During the year, Tecom enjoyed high occupancy rates averaging 95 per cent in Dubai Internet City, Dubai Knowledge Village and Dubai Media City, compared to 88 per cent last year. This is significantly higher than Dubai’s average occupancy rate of 69 per cent.
Tecom will continue to boost its diversified customer base and maintain its market leadership position through its unique offerings and competitive pricing strategy.
DPG’s revenues have increased due to the handover of some of its build-to-sell projects. During this year, DPG also made good progress in its residential leasing business, a major component of its leasing portfolio, saw occupancy levels above 98 per cent. Its facilities and property management business also demonstrated significant growth in 2012. It has also announced the relaunch of Mudon, a development of villas, and Bay Square to the market.
DPG will continue on increasing its recurring income by leveraging its robust leasing portfolio, delivering on existing projects and re-launching new ones, as well as expanding its facility management business.
EIT’s portfolio companies recorded encouraging performance during 2012. Both du and Axiom Telecom declared dividends for the first time in 2012 and Interoute posted double digit top line growth. Tunisie Telecom continued to face local social and economic challenges, but did manage to post an improvement in revenues and customer growth over 2011. Go Malta turned in positive results. .
EIT will continue to focus on value creation by supporting its portfolio companies to ensure each of them delivers strong and consistent performance, in line with EIT’s expectations.
Bin Byat said: “With positive economic indicators and trends across different sectors, Dubai is proving its resilience and in turn the outlook for DHCOG and its businesses continue to show promise. As we continue to improve the balance sheet and enhance the governance framework, we look forward to a continued recovery and growth in 2013 and beyond.”